The essential question I ask is whether Mahalo is gettingthe same treat ment as any other site. So, if you and I launch a site that uses the same "thin affiliate" sites for crosslinking and disregards the other Google rules that Mahalo disregards, will we get a pass or will we get blacklisted?
If Cutts ignore our site, then he's being consistent. However, the author of the post contends that Mahalo is getting away with stuff that is getting other sites penalized. That's a very different thing to the question of how well Mahalo ranks.
I don't think Google would give Mahalo preferential treatment - although sites like TechCrunch sometimes give us the impression that Jason Calcanis, Google Brass, Kevin Rose, etc... are all part of some sort of untouchable Silicon Valley illuminati, that's really not the case.
Google cares more about the quality of its search results than any personal relationship - I don't think they'd hesitate to burn some of Mahalo's domains if they thought it was negatively impacting users.
It seems, from the later demonstrations in the article, that the content is at least somewhat unique on these sites. I think that alone would keep it from being penalized on G.
That's been done though. Pretty much everything they rank for is from self-voting, manipulation that is contrary to the "democratic nature of the web" that Google wants to leverage. There are plenty of queries that demonstrate that, ones that Matt has indeed been shown.