ICO mean initials coin offering this is like Minning process. This is done just make people more aware about their coins like a bounty programs but slightly diffrent.
I disagree with you. projects may not produce coins. and do something else. And there are many such projects. they all want to raise money, but not everyone understands what to do with them. if there is no idea and realization of this idea, then the project will be closed within a year. and investors will incur losses.