Yes what will happen if i have example directory keyword in domain name, then i am on first page on Google for search term Directory .Then just imagine who want to submit website must pay example 5 $ to be listed in my directory,and monthly searches for directory is 100.000.000. Then if you just have a main word you get first page with good SEO. And you become rich over night.
because of lack of visitors, most directory owner don't market it enough, most directory owner submit it to a bunch of forum , and after that, they stop working on it. When they stop working on it, all they have is a low PR directory, which people won't pay for, cause its not worth it, people won't spend $1 $5, $10 etc on a poor pr directory. But if they directory is getting tons of traffic, and has high PR, people won't mind paying a fair price to be on it.
Quality paid directories do no accept everything for the money. I gave over $11,000 back in 08 for poor quality submissions.
Article directories mostly fail in making money because it cannot target its viewers very well. Providing high quality content regularly will also cost someone more especially if articles are not written by yourself. Aside from that, articles only rely on keywords that may be too vague when written to produce articles.
1. Most of web Directory running on auto pilot just for adsence earning 2. Most of Web Directory running on same IP. 3. Most of end user on these web directory direct user which is ref from web directory list..... those direct user never click on Google Adsence. 4. No Page Rank for this Web directory. 5. No proper seo.