Actually it works pretty well. With a few twists it's a great method for ranking.
I'm not saying it isn't... but it certainly
and takes quite a bit of time and effort.
Again - You need content (which either costs money or time to write) and links to get the sites indexed and pass juice - Which also either costs time or money..
For someone just starting out in SEO without a dime to spend but a lot of free time, this kind of method is FANTASTIC!
My method of making web 2.0s -
Step 1) Build up the 10-20 profiles you want to build the content on (Blogger, TypePad, Wordpress, LiveJournal, RebelMouse etc.. Are all good)
Step 2) Either create 10-20 DIFFERENT articles, or create 1 and manually spin them
Step 3) Post the content to your web 2.0s - Try to include relevant imagery, videos and change up the designs/widgets/sidebars on your web 2.0 blogs.
Step 4) Use niche relevant blogs that you actually read then post comments on them (With your web 2.0s within the URL field) - This'll get them indexed fast, and though most blogs will be NoFollow it can pass link juice
GG - Best method for newbies/no $s people looking to build up a solid, manual link profile.