I agree in much of this, but as far as I can recall "My sweetheart" was actually a finished album produced by Tom Verlaine. Buckley wasn't satisfied and planned to redo the entire album (with Wallace this time). In other words, he wanted to scrap the entire album. And again, I can understand why because this is not a milestone like "Grace". Of course you can't only release milestones as an artist and you shouldn't try to go by a succesful formula because it worked once, but still "My sweetheart" is pretty flat and uninspired sounding to me.
As a songwriter/producer I have stopped doing one thing. I don't play unfinished material to anyone. Why? Because songs in their rawest form, without arrangements or the correct instruments and so on, leaves to much to "fill in" for the listener. The song might be strong in itself, but if you are unable to imagine what it could be, then you're not "mature" enough to understand the context and the essence of the song. People tend to listen to the wrong things ("Funny sounding vocals", "Where's the drums?" and so on) fuuck I find it easier to play such stuff to other producers as they have another way of listening.
Another reason is also that an "immature" listener might say: "oh, that sounds like that song with that band". This might also put you of and also makes you less inspired to work further on a tune. The listener sort of biases you to listen to your song in a limiting way.
My point is that very few people were able to understand what Buckley was doing on his raw four-track demos. To me these schetches feels more like an intrusion into a mans work in progress. They are not very valuable memories of Jeff. As the perfectionist he was I bet he would be horrified knowing that these private tapes would be available for the public. I agree that it would be a shame if the songs were great but I don't think they were or they were on a premature level.
I also have the live-DVD from Boston which is a really bad production. Bad sound, bad lighting, Buckley in a strange, unfocused mood and the band playing a pretty uninspired set. Still it has it's moments of greatness and for people like myself who never got the chance to see him live, it's at least something. A release doesn't have to be perfect but it has to be something that the artist has performed or recorded with an audience in mind. In my humble opinion, of course.
