Err... okay, maybe I don't have this figured out. Still sounds like OTPs, and someone selling random data at $15 a pop per month. Having multiple floppies mailed to me monthly, with all the inherent difficulties, sounds like a lot more work than public-key management. My bozometer is pegged.
It gets even worse by my reading of this thread. They send out the first lot of pseudo-OTP via some *nominally* secure channel, but then the send you the subsequent months via the Internet. (Presumably encrypted with one of your existing keys.) This adds up to a system that isn't event a pseudo-OPT. It's just a conventional rotor-based cryptosystem, with an unevaluated implementation. Break one message containing a batch of new keys and the entire system is defeated forever. -Blake