I interpret it charitably as "some fraction of users forced to register in order to download data go on to become active users of the platform".
For example, this post - http://blog.kaggle.com/2017/06/06/weve-passed-1-million-memb... - talks about a million users. But does not say how many are low quality, inactive ones. Or even describe how they filtered out low quality users from their analysis.
Kaggle outsources data analysis to bright students willing to work for a tiny fraction of their actual worth. Their business model has nothing to do with their own analytics talent.
I recall — some years ago — when they were advertising for Jobs, some of the criteria for potential technical fitness was a high placement in some of the competitions. Plus, I have engaged in a few of the competitions and you have to have a team of capable data scientists to design them. They are not clueless people.