Sounds like a lot like the old Readability (except with a hard paywall instead of donation model). I liked Readability idea in concept, but it didn't exactly take off.
1. They charged too little. Far too little.
2. In an attempt to be more viral, they took payment for websites that were non-participants, with the theory that this would entice them to sign up to receive payment. What happened is that they ended up with a pile of zombie cash that they could not touch.
3. They routed everything through their servers, meaning that a large fraction of their costs was controlled by third parties. This is connected to 1.