Isn't that just a spammy linkfarm? It might work in the short term, but I don't think Google like that sort of thing so it won't work when they notice.
I think you wanted to say "content farm" like all those sites that use wikipedia text.
I don't think their app is spam though, or a content farm. I can see how a video page[1] could be a "temporary" page to discuss some content away from the madness of youtube comments. Do you think google will object to such "mass embedding" of youtube videos?
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[1] http://shelby.tv/kunaltandon/shares/524722b3b415cc5771058e23...
Youtube (Google) incorporates plays from video embeds into its ad model, more embeds == more views == more $$ for them. They don't mind at all ;)