I'm not a regular freesite submitter, but when I do I only do it to around 12-16 places.
I don't think small link lists are doomed, but they need to start acting less like a big linklist and more like a small link list
I'm not sure why any small linklist would use category recips when a general recip would endear them to submitters. I'm not sure why they need a page long list of rules when a rules page like Tommy's or RR would suffice.
If a small link list had a general recip, easy to submit rules that follow Tommy's or RR, updated their site regularly, and tried to foster a good relationship with their submitters, they would have a loyal following of submitters.