I have read the FAQ section and have seen the information on the life experience university degrees people have posted.
I agree with you that using the life experience degree for the purpose of proving your skill to get a higher paid position is pretty pointless, as a potential employer will check where the degree came from and know this is not a degree earned by spending time in education. They are a con and useless as you say, but useless depends on the purpose.
My friend now teaches in Vietnam and used a fake degree while previously working in Thailand but recently decided to move on. Vietnam also has the same requirement for a university degree but they are a lot stricter with checking degrees than Thailand so no fakes. He applied for a life time bachelor degree in teaching English and gained his VISA successfully by using this degree. It was his experience and professionalism that counted for the school, not the degree technicality.
Although the life time degree is useless none the less it does provide you with a bachelor's degree. As long as you are only using the degree to get through the technicality of the requirement to possess a degree to gain a work permit it has its uses. It is especially useful if you want to teach English legally in Thailand but don't already have a degree or the time and money to spend 3-4 years studying to obtain a degree.
Ok so someone with a proper degree rightly deserves the better higher paid jobs, however there are many lower paying schools that only ask for a degree as a technicality to process Visa's even though they are not bothered whether or not you posses a degree so long as you have a TEFL. This would especially be true of schools that point you in the direction of Koh San for your degree. Possessing one of these life degrees at a bachelor's degree level at least makes the schools daunting job of making their teacher legal easier for them.
So people with degrees gained by going to Uni can carry on taking the higher paid jobs and people with the lifetime degrees can replace the fake degree with their real life bachelors degree. Besides as I said at the beginning, if you went for a job where the employer really does require you have a degree whereby you actually attended uni they are not going to hire you if you have a lifetime degree after they have run checks.
Possessing a life degree won't get you a better paid job but it will legally get you a work permit and teaching license for the places that would otherwise allow you to supply fake degree credentials. Possessing one of these degrees to gain a work permit also means the teacher does not potentially run the risk of being thrown in a Thai jail for 10 years on a fraud charge for possessing fakes and the school does not run the risk of being caught out accepting fake degrees. The life degree is fully checkable, accredited world wide and also provides transcripts.
Is it cheating? Some people may feel this way, but read through this website and there are many posts supporting the fact possessing a university degree does not make you a better or worse teacher than the next teacher, it's down to proving yourself as an individual in the classroom. Many people feel it is a crappy law requiring a university degree to obtain a teachers license anyway.