As with everything, we have a limited amount of time to practice and market our music. I don't need specific testimonials to convince me that someone who spends the hours and hours it takes to assemble a mailing list and keep that mailing list current warrants a small fee for their work. Let's be honest, I just spent $825 for radio commercials that had only a small effect on my music in a select market, so $25 for submission to 150 labels doesn't seem like a big risk at all.
If anyone has any encouraging words about Record Label Submit, let me know.
Even if the site was legit, I wouldn't recommend people use it.
I would recommend doing focused targeting of labels you'd like to work with (labels who've helped develop bands you love, for starters) who seem like the kind of people who are in the business for the music more than the money, and make sure the contact you make comes from you, not a service. This says you care about them as much as you want them to care about you and your music.
Call their offices (on the phone!) to find out who unsolicited demos should be sent to, and then follow up again (on the phone!) with that individual after you've sent them a physical copy of your demo and they've had some time (a few weeks at least - these guys get pummeled with material) if and only if you haven't gotten a written response.
I did a campaign like this for a band I was a few years back, and though it didn't really get anywhere in the long run I made some connections with already connected people who remembered me for a while (because I was polite & sincere for the whole thing). One thing that amazed me is that after leaving dozens of messages over the course of many weeks, some A&R people actually started taking my calls and reading me their listening notes & giving me real honest feedback on what they liked about the demo and what they could do without.
Is it a lot of effort? Yes it is, but so's everything in music. Everything. Anyone who offers an easy solution is most likely running a scam.
I wouldn't pay anything to be another MP3 stuffed in an inbox that no one's really going to pay attention to. Chances are no one's going to really listen to it.