You may be right re funding … I hope not, I always like to see the little guy get a chance, even if they end up making a complete balls up of things.
Wasn’t SELINUX an NSA project in the first place ? <–serious question, in light of current developments can SELINUX be trusted ?
I’d also agree they may be better off doing something similar in software … though I gather the key part of things requires hardware (be that on a third party server or their solution without a third party being involved) … but I still like the spec of the phone (from what I can tell) so see it as just a.n.other Android phone with possibly some benefits … and I can’t see the harm in another phone on the market.
From what I gather, it’ll all be opensourced eventually … or at least the software side of things … not entirely sure.
Sure the encrypted side of things will only (AFAIK) work between 2 of the same phones … al la Blackberry (but without the blackberry servers being involved) … but I think that’s the point … for security concious companies etc. buy 2 … but it will work as an unecrypted (or using the normal Adnroid encryption method) for other phones.
To tell the truth, I think they’re getting slated because of the security emphasis … if this was just touted as a high end phone with augmented reality I think it would do better … people seem to be overlooking that, and getting hung up on whether to trust the encryption.
I have no answers to whether the encryption method is any good or can be trusted … but as a small outfit producing a good phone that “could” have potential (with enough devs onboard) with the augmented reality thing, and the fact they’re saying they’ll open source their software, I’m willing to kinda lay the security aspect to one side for now.
Doesn’t mean I’ll put my money where my mouth is, but that’s no reflection on the project itself … purely that I’m not a risk taker, and don’t need an Android phone … with or without encryption. 
I truly wish them luck … and not just because I vaguely know 2 of then from the Peppermint project … but because I’d like to see one of these things in the flesh … who knows, maybe I’ll hate it, or it could be the game changer it’s touted to be … my point is, “only one way to find out” and that’s if it goes into production … so I hope there’s enough risk takers out there.
Dunno how well their funding is going … sure it currently looks far too slow to achieve their goal … but I’ve never really watched these things, didn’t the Ubuntu one have a massive spurt at the end, where people were obviously waiting and gathering info ? … who knows.
BTW, they’ve just released “some” extra info (with more to come according to them) here:
http://www.indiegogo.com/projects/qsalpha-quasar-iv?c=activity