I think a part of the problem is that, as nice as the Rezzable sims are, they're really novelties. That's really just due to the limitations of
SL. Greenies Home makes for fantastic screenshots, and it's fun to look around and see what's there....but it's a statue. One big giant statue you can crawl around in. Toxic Gardens and Carnival of Doom have the little HUD things that add a little to the experience, but it's still a chuckle and an "ooo, neat". I don't know that many people feel compelled to return to the Rezzable sims time and again.
Add to that, the inflated idea of the L$'s worth in the minds of nearly everyone in
SL ("L$199! That's expensive!" Actually, it's 70 cents, American.), and I don't see this business model working.
I kinda partly blame
SL. Content creation tools and abilities have not substantially changed very much, and there's a lot of very basic things entirely absent, making the creation of a truly engaging and immersive experience difficult, if not impossible. (My thoughts being that it should be possible to make even an empty sim feel alive.) Therefore, however skilled creators are, the upper cap on what they can accomplish is very low, making it difficult for them to convince customers to pay them what their skills might be worth.
Additionally, in my experience it seems large corporations really do not do much research when it comes to opening a presence in
SL, so what Rezzable offers for corporations looking to create an
SL presence might go overlooked by those who'd most benefit from them.
That said, looking at the success of places like Grendel's Children, I can't help but suspect Rezzable would be a lot more successful if they substantially lowered the prices on items they sell. I've heard of a number of places doing well with donations, so that might help as well, allowing them to keep their sims running on minimal out of pocket expense. Possibly even at a profit. Maybe not enough to pay salaries on, but enough to cover the
SL expenses at least, and certainly more than I expect them to make going this route.
Also, what Siyu said. I'm really shocked to learn that's how they run their business model. That's just....broken. I can't see it being sustainable in
SL as it is now. Renting vendor space on the other hand, that's seems like a gold mine for those who do it.