To all the people dismissing the site based on low potential earnings for the developer.
From a quick look on elance. There are currently 10,344 "Web Developers" with a listed hourly rate. The cutoffs for 50/75/90 percentiles are $15, $25 & $40 per hour. Obviously dance doesn't represent the top earning developers. Elance covers the low end, mostly.
The hourly rate of developers ranges a lot. So does the hourly output. Silicon Valley veterans expect $100-$200 per hour. On a worldwide scale, that's high end free lancing. Jobs usually come by way of personal introductions and relationships.
I totally agree that few are going to turn down a job at Google to build $3500 prototypes.
The gigs you can get as a freelancer for a SV company are not something that most elance developers can compete for. You can't cold call your way into them and you can't get them through a website. Part of the reason is skillet, some of it is cultural. The ability to relate to the person hiring, sell yourself and a whole bunch of other soft reasons play a role too. They can't get to the high end.
A lot of the startups in this space seem to be trying to crack the middle end, which IMO is underdeveloped. My guess is that's the $25-$60 per hour range. This is (as mentioned elsewhere on this thread) rational in the context of average developer salaries in some parts of the world. BTW, $50 per hour X 20-40 hours per week will buy you a great lifestyle.
Also, a freelancer on his 26th $3500 prototype may get pretty good at it. They'll be using suitable tools have methods for coxing ideas out of clients. It is it's own skillet.
If they have a way to make this happen, then it's an amazing product. If not, then there will be a lot of disappointment on both sides.