I think that it's obvious that the rates are going to be lower than if someone specifically commissions you to make music for them.
With this there's no limit to how much you make because if your loops are good then loads of people could download them.
If you can get paid better money and you don't need this opportunity then fair play, but I think this is a good, risk-free opportunity for some artists to make a bit of money and get their name/music out there.
It's not about cheapening your music by taking the best section of one of your songs and looping it. It's about writing loopable music that fits a specific theme and if you put your own style and creativity into it then I don't really see how that's cheapening it.
