Though on the plus side it is quite neatly put together and the directory does look like it is a good quality directory.
Red Hot Chilli does have content of its own - they have a small but good selection of hand picked, reviewed, links. Not much, but better than a poke in the eye.
There are also several thousand smaller niche sites that also offer PPC results from the likes of Overture and Espotting especially. Mirago is doing a good job of attracting affiliate sites, and I would expect to see more Webfinder affiliates sooner rather than later.
As these new sites grow, others fade; there is only so much room in the market. If one site, such as Red Hot Chilli, starts getting more traffic, it is really only replacing another, such as Search Demon. Swings and Roundabouts.
You shouldn't be surprised to see sites like this appear more though. The recent update has pushed out many sites across many sectors, and made the main SERPs more focused on directories and information based sites. These PPC based sites fit this idea, and in small numbers aren't an issue. It is up to Google now to make sure that they don't overpopulate the listings.