I don't agree that everything has to be trustless and decentralized. That is the wrong measuring stick for a bitcoin small business. Reputation system works. That said this example company raises serious red flags for the reasons you mention, it is not scalable, and the problem they purport to address needs a decentralized solution. No business should put their customers in the Fed's crosshairs, which is the domain of fiat. I haven't seen many scams like this in the bitcoin space. The fact you don't mention who they are demonstrates the power of reputation as they will in short order have none.