I was fairly skeptical about Mahalo, but I think it's fair to say I was wrong - the project has worked out pretty well. Well enough that Google is jumping into the space with Knol. Mathew Ingram comments:

Mahalo has a bit of a head start, but the model is surprisingly similar: get authors to create and “curate” articles about topics, with links and so on. Mahalo has also proven to be fairly successful at getting its results to show up high in Google searches -- to the point where Allen Stern has called it “an SEO play.” But will it continue to rank as highly when entries on the same topic from Google’s own knowledge directory are available too? I doubt it. To add insult to injury, Knol will also allow authors to put AdSense on their pages and share in the revenue, which could make becoming an author fairly attractive -- at least as attractive as Jason has made Mahalo, or Seth has made Squidoo.

Regardless of how this plays out for Mahalo, it looks like the base idea was (and is) sound.