The idea of book-on-demand publishing has been around for a while, but generally in the form of doing your own. This is the first time I've seen a 'vanity' publisher offering book-on-demand. Looks to me like an excellent idea. In fact, I may look into what it takes to do that business; I have had an interest in the publishing business for many years (I am a freelance manuscript reviewer for Addison-Wesley-Longman).
One of the biggest champions of the book-on-demand idea is Don Lancaster, who has produced several of his own. There was a funny thing about Don that I ran into recently, however: He had a bestselling traditionally-published book "The Incredible Secret Money Machine" that he revised and re-published back in the late 90's. I tried to get a copy of the the revised version, and it was out of print and unavailable everywhere I looked. I wrote Don an email asking why this was so -- I thought it odd, considering that Don has publicly stated that no publication should ever be unavailable. He replied that he just had not had the time to provide TISSM in e-book form yet...