The length of the game isn't as important as its girth.
Whether it's two hours, forty hours, or twenty minutes long, how stuffed is the game when it comes to content? How full is it? Sure, a 40 hour game can be fun, as long as it keeps you interested by adding new bits to encounter and use. But if the new content ends 15 hours in, it becomes a chore to finish that last 25 hours. You're just working toward the end then, grinding your way through the same things over and over, instead of encountering new and exciting things. Meanwhile, the 30 minute shmup that has multiple ships with different weapons and attributes, branching paths, various score bonuses to learn how to acquire and utilize, and even hidden "final" bosses (say "hi" DonPachi series), will keep players coming back again and again for years on end. There's so much to learn and get a grip on, that it pulls you back in with the tease that you just know you can do better and get a higher score if you learn more of the game's tricks. Is this a sure-fire way to keep everyone interested? Nope. There's no such thing as a sure-fire way, as each person is different. But that can be countered at least a little if you pack that game with a steady stream of new things to learn, see, work toward, and do.
So, does it hurt the games artistically if people aren't finishing it? Not really, no. Some will find it fun to plod through that aforementioned 25 hour stretch of nothing new. Others will get bored and turn it off for good. If anything hurts the game, it's what is and isn't put into it. If the content is there to support the game's length, look and feel (and done at least reasonably well), it won't be the game's fault that players lost interest. That blame can rest on the shoulders of the individuals holding the controllers, and their fickle, fleeting tastes. Like all art, what a person likes and dislikes is going to be damn subjective, and could change weekly. So trying to make your art/game appeal to all, all the time, just isn't possible. But if you can pack your art with gameplay/visuals/sound/story/whatever that's done well, and not slapped together in a half-assed manner, you'll have a better chance of keeping your audience there to see all you wanted to show them... assuming the audience doesn't have the attention span of a ADHD-riddled ferret.