Awesome for those customers. It's parasitic for the developers. And regardless of what said customers say to paper over it, it can't last. Sucking the life, time, and money out of a developer goes on until they metaphorically drop dead and fall off the edge of the forum. And customers most certainly don't want that.
It must have been hard enough to raise the money they did get for this. From the competence and skill I presume these developers have, the budget is short by at least 12K. No, that is most certainly not what people want to pay, but was necessary. He's being really tactful about how damaging this is to him.