Its not legit.. It will be copyright infringement to scrap or steal the content of others which are copyrighted And moreover almost all Ad Publishers have objected these kind of sites in their TOS
Autoblog is a best tool, when you want to publish information regarding any topic, while you have data generating application. Like when you are playing a game online, the website may want to put the information about the game advancements in a blog. They configure their blog to the database and it is going to produce a great blog which many gamers are ready to spend time with.
The ad publishers don't truly care. Whatever does their work is good for them. Most websites, blogs, legally do not have their material copywrited. Is Google reader as offensive as an auto blog? because thats what it is. If you credit your sources, then this is good for the other blog. Most autoblogs that credit sources, help the sources they scrap from. Like anything, it all depends on your approach to autoblogging. If your autoblog has no focus, and you are just copying another blog's work, then good luck taking pride in your autoblog. Look, here is an autoblog I take pride in. http://www.ohzeldacostumes.com/blog/ beautiful scrapper. makes no money lol.
Scraping content from another blog and using the same exact title and excerpt/contnet is in my opinion a spamblog and also it's content theft and it says so in many sites and feeds copyright. However creating a post with a different title then an original sentence or two with links to several relevant posts is fine and what most respectable news or feed sites do. But making it look to the SERPS like its your original content is again a spamblog. I would have no pride stealing someone's hard work. If you are going to be too lazy to post original content then at least use an article directory or something else that allows it.