Shortcomings of the game aside, playing the modded demo is a blast! Two sectoid commanders on Classic difficulty are just barely beatable with the starting squad of four (bulked up with magical ghost/flying kevlar).
There's a demo editor to play with different (spoilery) enemy types, and a way to edit the demo so the actual (second) mission shows up first instead of the tutorial mission: http://forums.2kgames.com/showthread.php?140536-Demo-Editor-I-just-Made&
I haven't used the editor yet, only the modded demo files that pit you against two sectoid commanders, two heavy floaters, and two (gulp) chryssalids.
It's not exactly xcom in all its features, but the difficulty and brutality sure is there.
Whoever set the demo to easy mode shot themselves in the foot.
I played these two early missions from the demo at PAX last month, and in the full build this second mission was just about as "tutorial-y" as the first. After moving the heavy onto the roof, in the second turn they teach you how to fire the rocket and use overwatch, and walk you through some other squad positioning and tactics. I believe all the enemies were sectoids as well. This might explain why the demo mission feels so weird and linear, with seemingly nonexistent enemy AI and preplaced enemies: originally it's a linear, showcase, tutorial mission that they "de-tutorialified" for the demo. A very weird choice overall.