Negative hype can kill a product that could have been good.

Positive false hype can deceive people into wasting money.

Sure, complete honesty would be ideal, but if you say "well it sucks right now but we promise it will be ok when you buy it", not many people would rush to order one.

And they shouldn't. It's just another way of saying "people acting rationally based on truthful information"

Many good products never made it to market because of insufficiently good perception.

That should be a separate issue. It's not the only available path, just one often taken because it's the most forgiving of shoddy business practices, doesn't justify its existence, either.

On the flip side, creating positive hype out of smoke and mirrors can be used to kill a competitor's product for no good reason, so it's not quite ok either.

I think people are starting to realize the depth of corporate deception and bad-faith practices and how that affects everyone at large, and so they're rightly tired of them and trying to reset it all back to simple, effective, and fair ethical standards.