I'd be happy to include an edw519-style bulleted list of why webputty is 'a bad thing', but I guess it depends upon who their target audience is for this product. If they're targeting someone who is used to ssh'ing into their account on their shared hosting company and editing their css 'live', then yes, I think this product provides a benefit to that user.

Any site I've ever worked on I've always had atleast 2 environments, a local environment and a live environment. Any company I've ever been a part of has had at least 3 environments (sandbox/qa/live) and it's very common to have a dev and staging environment on top of those as well. The reason you have a minimum of 2 environments is so that you can do all of your testing without breaking the live environment, which is what this tool seems to ignore.