Anyone can replicate with ease the designs being sold and launch a free competing service with the same (or better) offering. I don't see a viable business enterprise here.
I disagree - it's hard to stay in business if you don't make money. The fact that someone else might offer a similar product for free has stopped, e.g. the makers of premium website themes from making huge piles of money.
There's definitely a hurdle to be overcome in marketing products to those people least likely to have money lying around, but I think that's mostly a question of demonstrating value. People will buy it if they think it's worth it.
I could see this kind of a business working. I don't like the yearly subscription since I would only want one that I really like, not 50 meh styles. All the examples on the front page scream "21 year old hipster designer" and those actually seem to be all the templates right now.
There's definitely a hurdle to be overcome in marketing products to those people least likely to have money lying around, but I think that's mostly a question of demonstrating value. People will buy it if they think it's worth it.