My .02 on Taxi.
I was once a member, and I know Michael Laskow (the owner) personally. One of the nicest guys you can hope to meet. Several years back when I was in L.A. to get my CD mastered, he met with me, gave me a tour of the offices, listened to my tracks, and liked what he heard enough to pick up the phone right there and then and get me a meeting with two major A&R guys.
So the service is a legitimate service, and their contacts are indeed legitimate as well.
Now, for the reason you still see many of the same ads in the magazines for Taxi. While the service is for real, it is better for certain people, depending on what they're looking to get out of it. If you're a songwriter looking to place songs or tracks, and you have no networking or connections of your own, it can be a valuable service.
If you're an artist or a band looking for a record deal, you'll probably find yourself disappointed. The reason being, the one flaw in the Taxi model is lack of follow up. If you respond to a listing and your stuff is forwarded, there is no way to follow up with the recipient to A) make sure they got it, or B) see if they've listened to it. And one thing that is huge in this business is the followup. In a lot of cases stuff will languish on a person's desk if a fire is not lit under their ass, and that's where Taxi falls short in my opinion.
Combine that with the fact that when it comes to finding and signing actual artists and bands, most A&R guys are looking to hear about the act through buzz, word of mouth, etc. In other words, they only want to sign acts that already have it going on for themselves. Which is a big reason you don't see a lot of major success stories with artists getting their deals through Taxi.
The other reason, in Taxi's defense, is that some of the acts that have gotten deals and been successful as a result of Taxi connections didn't credit Taxi with it. Sixpence None the Richer was an example.
In any case, if you're a songwriter looking for placements, it can be a good service. If you're an artist looking for a deal, you're likely better off getting out there and building a buzz on your own, and the industry will come to you. But then again, even Taxi says that's what you should probably be doing anyway.