meh - I handle interviewing/recruiting for years and have never found a need for anything like this, it is pretty easy sending challenges to promising candidates and collecting them for review by email. I'm surprised techcrunch would cover such a narrowly focused technology. I understand solving niche problems but I don't see broader use for a tool like this?
I see it as a useful tool for culling resumes from Monster-type job sites. Submit a job offer, and candidates apply to it by solving a couple of easyish tests. You wouldn't use it to interview promising candidates, but to assist you in filtering out the promising ones from the rest. Think of it as one step above FizzBuzz.
As an interviewee I've used Codility before, and that was actually a very good experience. They had some bugs with displaying line numbers, but the functionality was all there. I would recommend it from the testee perspective.
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[ 3.1 ms ] story [ 20.8 ms ] threadFailed solutions display the output of your program run, but do so incorrectly by eliminating leading line breaks.
Also, a program can just pipe the input to the output and see what the test cases are.