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say the guy has 20 people who are interested. He charges them $10 a day for 30 days. 10x20x30=6k a month. Plus he is making the disclaimer page and the main page, so obviously its his referal codes in the disclaimer and main pages. If he's submitting 20 times a day to all the major LL's, he'll make his money.
The real question to me, is that free sites arent just a disclaimer a main page and two galleries, they all have to be the same background, the same color scheme, the same niche, etc. So if he's just grabbing any two random galleries he'll get rejected by most LL's and he'll have 20 unsatisfied cutomers.
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