Notice it doesn't say anything about people staying, just about people coming. Of course that if no one stays there is no ecosystem, but this is a work in progress. By attracting nerds, they got at least one part right (http://www.paulgraham.com/siliconvalley.html).
The chicken/egg problem is that we can't find follow-on investment here, so we leave. But if we leave, no VC will want to be here to make follow-on investments. What should we do?
In fact, the Demo Day needed to be arranged by us instead of SUP staff taking the initiative. Hell, they were actually against it when asked on multiple occasions for their support. In the end all they did was blog about it as if it was their idea.
The above two paragraphs really sum up the problems. Reimbursements are tough, without clarity, etc., but the program will surely fail if they don't figure out the above.
More countries need to foster entrepreneurial endeavors with a solid mix of residents and non-residents (almost like an exchange program) to get a better global mix of problem/market/solution. Startup Chile appears to be a good first step at addressing this.
However if Startup Chile didn't create a strong ecosystem (including investment and other support) then there's a risk that an increasing number of companies will fail once the program ends. Programs with high failure rates won't survive and have less chance of being funded in the future.
Hopefully Startup Chile is capable of adapting and addressing these concerns and other incubator/accelerator outside of long standing startup environments (e.g. SF, NYC) can learn from this example.