Having been involved in one such affair (see my other comments on this story), I'd put that in the "true but not useful" category. It still allows a form of blackmail. Why should the target of defamation have to pay to do this? What happens when most people's online reputation is mostly a matter of how much they were willing to pay to a reputation-washing company, and people in the lower economic echelons can't afford to play? These kinds of companies already exist, and make as much money burying genuine misdeeds or making up accomplishments as anything else. How is increasing the size and importance of that industry a good thing?
It’s just a way of breaking the “business model” for this companies.
If you pay up, there’s nothing preventing them from trying to hit you again with more demands (in fact it makes economic sense since they don’t need to generate new “content”). If you go and hire a SEO company, you’ve broken the economic reward for the scammers, or at least you’ve reduce it.
