I certainly respect all designers and the complicated process of design, but one needs to balance artistic integrity, expectations and the reasonable request of a business to be given some sort of basic financial proposal.

You're kind of missing the point here. A few of the problems with giving clients anything close to an accurate estimate up front:

• Most clients come to us before they've done their homework. We get a lot of blank stares when we start asking about requirements, constraints, KPIs and which resources the client will be able to provide and what we'll need to hire outside help with.
• The decisions and opinions of the client can have a huge impact on what something cost to build. If the client starts requesting heavy animation or other unique interactions during the design phase it's going to cost a lot more to build. As a designer, it's my job to design within constraints (goals, budgets, timeline, available resources, usability, audience needs, et. al.) but when the client gets involved they don't follow the same rules.
• We're often building something that's never been built before. If I asked you how much it would cost to build a spaceship to fly to another solar system you would have no idea where to start. As something that's never been done before it's impossible to accurately guess the time and resources required to research, design, build and test something like that. When building something new, if you're doing it right, you'll usually have some failures before your successes. We have to account for those.
• As a client, you're often asking us to do more work than you think. As experts in our field, we have a responsibility to give you accurate answers. So when you haven't thought something out ahead of time (like your target market demographics) and lean on us to answer those questions it turns in to a research project for us which is an entirely different service you're asking us to provide.

So, how do we give an accurate estimate with all of those issues? I've seen three different approaches. Some agencies will just quote you something very high and hope the project scope doesn't surpass that. Other agencies see this as an opportunity to "up sell" you every time something goes outside of their often underestimated scope. And there there is the milestone payments option.

I went to a conference recently and listened to how on D.C.-based agency deals with this problem. They break the project down in to multiple phases and quote one phase at a time. Each phase has a deliverable. For example, if your company goes to them without understanding and defining the full needs of your users and scope of the project they'll run through a discovery phase (which you pay for) but you get a document in the end that you can take to any agency if you don't like their quote for the next phase. It keeps everybody honest, they don't have to give a wild guess for something that's undefined and the client can always walk away after a phase with something concrete for their money.