Upload & Sell: On
After your posting, I did some searching and found this thread with more details about what's actually being done behind the scenes:
I haven't used it yet (personally) but it seems like they could have done a better job by using something like wavelets instead of the standard scheme (DCT) used by JPEG. Their scheme, in my opinion, is like a more modern JPEG but with better latitude for post-processing.
Like all tools, it might be the right approach for a large volume of pictures where the absolute quality is secondary to the volume of data you have to deal with. Eric (of Adobe) does seem to indicate they did a lot of testing before deploying, so maybe this is really the ticket.