The resulting story is (as expected) not good. As for the cost, assuming 10 words per sentence on the average, he pays $0.01 per word. Compare with what some magazines pay:
http://johnaugust.com/2009/how-much-does-a-short-story-earn-..., since most sentences will be crap, it's not that much cheaper.
However, I still think this is fantastic! Obviously it can be of use of seeding thoughts to get out of a writer's block, someone can offer this as a service. However, the cooler application would be to couple this with an AI trained on contemporary literature to select more promising sentences automatically. This may also be applicable to other fields, i.e. painting, where you can ask people to come up with local abstract designs and put them together to get the final picture.
