My suspicions run along the lines of: they probably could have released it, but it wouldn't have been at the level of quality they liked; they had planned to fix and update things through patches and DLC (such as UI improvements etc). Given the feedback, they requested more time, and if they were going to take more time... well, why not do it properly? It gives them the chance to fix all those niggling problems that have to be pushed aside for a normal release schedule, and to create more content. There will be some extra free content for everyone as a result of the delay, I suspect, and that can only be a good thing.
From a developer's perspective, this kind of delay is a godsend. Deadlines are a necessary evil, but evil they can be, as demonstrated by many, many games that get released before they should -- I could name at least a few Obsidian games that suffered from this. Delays are good for the consumer in the long run, even if it means they have to wait. There'll be some form of compensation for it in terms of content, and they are giving out refunds for those who want that.
As for the short timeframe... often a publisher won't take things seriously until things actually get serious. I agree that this was a terrible move from a PR and marketing perspective, and not great as far as short-term brand trust goes -- but I'm sure it will pay off for them in the long run, and I for one am pretty damn glad for it, even if I have to wait longer.
Keep in mind also that this kind of development -- short term, totally digital, with so much feedback and interaction with the online community -- is pretty new. Even these kinds of game updates are pretty new. There are bound to be problems with their model, but they'll iron them out.