It makes sense to show potential customers pre-development screenshot mockups but I find it mildly sleazy to deliberately lead them to believe that these are screenshots of an actual working system.
A few years ago I found myself working 70+ hour weeks for nearly 2 months because the client whose project I was put on had sold their software product to a large telecommunications company before it was even specced out, let alone developed.
I don't mind faking screenshots to drum up business and test how viable an idea is, but if you accept money for software that doesn't exist, and then demand a ridiculous turn over time from your development team (whether in-house or outsourced), then you're scum.
I must say that while I agree, I think that in this situation you (or your company) greatly profited from the bad planning of your client.
Put another way: your client also paid a lot of money for their jumping-the-gun, but I'm sure this was calculated into their sale price, and was probably not bad planning at all, from their perspective.
