I think you're overestimating Google's capabilities a bit. How are they supposed to detect that the content is generated on the fly? If it's unique enough upon generation time, they really can't tell the difference between this site and a site with legitimate content on it.
This is the core of why Google uses things like links as a ranking signal. If they based it entirely on the content of the site, they're easily duped. While it's somewhat trivial to manipulate your backlink profile to increase your rankings, it's rather hard to fake links from known high quality sites like the New York Times for instance. So they can "trust" links more than they can trust the content of the site they're crawling.
So even though this site has a large amount of content indexed, the changes of it ranking for anything more than gibberish are so low that it doesn't even matter.