Project manager: "But hey, we shipped on time!"
Because these corporations behave this way, it excludes them from the set of people Canonical has to worry about pleasing at release. So LTS releases, right on release, are actually allowed to be less stable than non-LTS releases. Because the majority of their useful lifetime, when anyone that matters is actually running them, will be spent stable.
Late adopters wait because they'd like somebody else to flush out the early bugs. If this is actually Canonical's plans, that 14.04.1 is the first release expected to be stable, then if I were a late adopter, I'd just wait for 14.04.2.
The let's-trick-people-into-adopting-something bit is basically an attitude of customer contempt. It's assuming that the release knows the customer's business better than the customer does. Whether it's right or wrong, it's a dick move, and acts to decrease trust.
Absolutely.
Better for whom? Not for the people who take the LTS moniker seriously, I think.