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User-Generated Content Sites Need Millions?

A great post on BusinessLogs asks why do user-generated content sites need millions of dollars?
Other than servers, and a few programmers, users do all the work, and so why do they need to raise millions of dollars in funding to keep the whole experience going?
I know this does not pertain to bloggers per se, but I think it is important to note, as these sites are taking blog content, or competing directly with blogs.
Mike Rundle makes a great point when he says:

What I’d like to know is who is honestly needed to run these user-generated, completely automated, content aggregation portals? What are these people doing besides watching the stories come in and populate themselves in their database? How many engineers and designers do these automated portals really need to hire – it’s like too many cooks in the kitchen, all bustling around, screwing things up. Set up the service, set up the algorithms, the design, the features, and then all you really need to do is make sure nothing breaks. Want to roll out some new features? Great! Write about 10 lines of PHP and pull some data out of the db in a slightly new way and you’ve got yourself a point release.

Good on him for reminding us how rediculous the whole thing can be. Now if only venture capitalists read more blogs…