I wonder how can this be economically viable...
They're reject cells from the manufacturing process. In manufacturing you have a specification your products must meet or exceed for you to sell them with a certain rating. Some fraction of the cells a factory produces don't meet that specification, so they're either thrown out or used in unimportant applications like this.
The recycling part is potentially interesting. Whoever figures out how to get a ton of these discarded can make money by making power packs.
A 600mAh 3.7V battery holds the same amount of energy as a 1500mAh 1.5V battery.
You can get a four pack of 2800mAh lithium ion batteries for that price, though.