Black hat blogs or simply a genuine attempt to place relevant content on the web?
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1. Yes. Some say gray hat, but It's defiantly black hat in my books.
2. Are they subdomains on wordpress.org? If so, yes they are free! If they are on their own domain they may have self-hosted wordpress, it's free but they would still need to pay for hosting + domain fees.
3. It could, and probably is either.
4. I don't see it happening in the near future, but at some point I think they will have a crack down on this, It's one of the harder things for google to detect, one small step at a time I guess. If you report them to google's spam team (i'm not sure there view on this matter) but they may be able to fast forward and penalize them accordingly.
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2. I believe you mean subdomains on wordpress.com, which are free. Wordpress.org is where you can download the Wordpress software and self-host the site.