Keyword domains used to be a lot more powerful than they are right now. Based upon watching a lot of their rankings, I believe that Google turned down their value in early 2011 - shortly after Matt Cutts said that their value would likely be turned down. Maybe they will do that again, I don't know.
I agree that some of these sites rank well with very little content and poor user experience. That generally occurs where competition is rather low in Google or where it is low to moderate in Bing. Where competition is high a domain only makes a fractional contribution to the rankings. So when you see them ranking well for highly competitive terms they are doing the same type of SEO as any other site with poor onsite assets.