To the extent that people use the word startup to mean, "Er, I made some web pages, maybe a little glue code in Ruby, etc., and it has a purty design and single toy barely-a-feature feature", yes, the word startup is being devalued. Wake me when there's a real business there, making money, and it lasts for more than a few months. Investor money is also dangerous because it's much easier to create a sort of shake-and-bake business, out of nothing, purely on investor money, as opposed to bootstrapping and growing off of real customer revenue.