Yes, this is how it works (which the article doesn't make especially clear). You add something to your 'steam wishlist' and steam e-mails you next time it goes on sale. As far as I'm aware, the wishlist has no other function.

Of course, part of the reason this works is that a lot of sales are like 70% off - you'll get e-mailed when that $25 game on your wishlist is available for $7.50. There would be much less benefit to the consumer if they insisted on e-mailing me to tell me that $25 game had been discounted to $23.