Right. There isn't any goodwill coming out of supporting DMOZ, and the only other benefit is TimeWarner being able to fast track their own submissions, big whoop. However with all the past problems and now this, it certainly undermines AOL's reputation.
If AOL wanted to demonstrate competence, they would spin it off. Hundreds of opera companies, ballets, and small museums can be run as non-profits, not to mention wikipedia, and generally thrive in a non-profit independent manner. DMOZ could without question be spun off with an initial injection of seed money to fund a development director and a two marketing admins tasked with raising dough from the various search engines and other concerns that are up to their necks in money. Would be the slam dunk of the year in terms of raising easy money to fund DMOZ better than it ever was with AOL.
The DMOZ and AOL relationship resembles a kid trying to get by on a breast that has gone dry years ago. It's a mess. Time to wean.