Usability-wise they're horrible. I'm not so sure it's going to hurt their rankings though. They're using the #! in URL structure to conform with Google's AJAX crawling rules [1] and Google is linking to the pages in the SERPs.

Now they have screwed themselves in an entirely different way. Google has indexed their staging server [2] which is now password protected and outranking their site [3].

[1] http://code.google.com/web/ajaxcrawling/docs/getting-started... [2] http://www.google.com/search?q=site:stage.gawker.com [3] http://www.google.com/search?q=flubbed+because+she+was+drunk