What is the purpose of the "demo" version there? Wouldn't it be easier to 
have a separate "demo" controller?
You could then simply define the default for the domains as:

routers = dict(
    BASE = dict(
        domains = {"domain.com":"app", "demo.domain.com":"app/demo/index"},
        default_application = 'app', 
default_controller = 'org',
 default_function = 'index'
    )
)

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