It also damages their reputation. I'm sure a lot of people that visit a site like the one I described above wouldn't come back again. Also, if you don't take the time to configure your site for the search engines, you could get a bad listing. It may take months to get it fixed. Now, I'm not saying to complete the site.
All good webmasters know that a site is never finished.
It should always be changing, with updates on a regular basis. But it should at least be fully functioning, with a good amount of high quality content. Do your visitors a favor. Don't invite them over for dinner until the dining room is built. Search the database for the features and price you want.