No, the hype was real right when the game was released in Japan it's why the US release was so anticipated, and I remember that perfectly for one very good reason : it's the only game in my entire life that I imported from Asia (the HK version had english text) because the word of mouth was ridiculously good.THAT'S a lie, initial JP sales on that game were awful. Demon's souls was a sleeper hit in JP, selling about 30k copies initially and only 160k copies by the end of the year. The JP/Asian version of Demon's was also MUCH worse than the EU/US version, as it had a number of (once again) frustrating, gamebreaking bugs that were included on disc for the US.
Also original impressions from western press were awful. The only reason Demon's Souls scored so well in US and Europe is because of the 6 months hype from Japan and import.
I don't know, maybe because Yoshida hated the game he played and Sony didn't believed this kind of game had a chance to find audience outside Japan ?You think the game was so hyped and popular that Sony decided it was too hype and said "Altus, you handle this hot new game!"