It looks like Chris Gee of the Prepared Mind blog, will be having a podcast interview with LogoWorks representatives. Currently, he has already interviewed a couple of freelance designers who work with LogoWorks and consider them a good company. One of these designers said that they even had earn $35K working on logos for around $200 to $400 if selected. At one point she said she would re-use logo concepts, and keeps them according to industry.
I look forward to the podcast. But I doubt that I will ever agree with their business model. But for now they are successful. And for some people that would be proof enough that it is a good business.