This is all true. There exist essentially blackhat versions of virustotal that don't submit the samples, and don't have a feed delay that are pretty popular among the virus writing community.
One of the ways that virustotal IS used however is by checking the hash of their malware to see if it has shown up yet. That lets them know if someone has taken an interest in it yet, and if they have, it means they need to start rolling a new version.