Re: "Women can use the site for free"
"What a failure."
That depends on your definitions.
Perhaps it was a success in that it enlivened the lives of some men with an apparently-plausible fantasy. This really needs to be taken into account, I am sorry to have to say.
One might well think that for at least some of the men using the site, this was about as close as they're going to get to a real woman and they were certainly under the impression that there were many desirable women on the site - because that's what the internet is; and that's what human imagination does.
(Example: note that for all the stories on this site, the pictures which accompanied the stories were all of young, well-maintained people - as opposed, for example and contrast, to grossly overweight people with questionable hygiene. Which do you think would be closer to the underlying reality?)
Or one might think that the website was a success - for the people who ran it - in that it made quite a bit of money: even the paid deletions earned them a good $4 million (rounding off to 200,000 deletions at $20 per.). It would appear that the website was a goldmine, but that might change depending on the legal fallout.
(In spite of the T&C's stating that some of the profiles were "created for amusement" I think that the fact that nearly all of the supposed women were non-existent goes far far beyond what such a disclaimer should allow them to get away with. Hopefully they will be made to disgorge, at the very least. This is a separate question from their culpability for letting the user data end up plastered all over the internet - such cases need to be punishable by imprisonment.)
Depending on one's point of view and definitions, the site might or might not have been a "success" but it certainly was a fraud. Even for me, having a very low opinion of the internet, the reality was astonishing.
As someone once put it: No matter how cynical you get, it is impossible to keep up.