Much has been made of the question, especially by the competing show.  Chris Shipley of the DEMO conference offered a few answers in a recent blog post:

“Why does DEMO charge companies?

I’m glad you asked.  There is the obvious reason: DEMO is not an insignificant production.  In order to assure that everything works perfectly - that our production crew can give each company the focus, equipment, and advice it needs to pull off a flawless 6-minute demo, that there is more than enough bandwidth to support  onstage presentations and an audience full of bloggers, that our media team can recruit an active and engaged group of journalists and bloggers, that the pavilion is carefully managed  so that attendees can find and engage with every demonstrator, that each demo is captured in our Web archive - DEMO doesn’t cut corners.  We buy bandwidth, we invest in equipment, we hire great PR people, we bring in the best technical AV team in the nation.  And so far, no one has offered to work for free.”

There’s certainly something to be said for having things work.