"They work OK if the traps are not breaking targets."
On the plus side, it incentivizes the club to keep the machines in good working order. And it incentivizes the squad/shooter to not just keep pressing the button over and over when the machine is breaking targets hoping it will fix itself.
"For example if it is programmed to give you 27 targets and you call for one to look at, then you only have one extra in case of a broken one or a bad pull (outside noise that set it off). But if you have a squad of 5 people you have 10 extra targets (one to look at and 9 for broken birds or bad pulls). It is even worse on a skeet field where you may look at 2 targets (a low and a high)."
True, but if you're shooting a few rounds, the extras add up pretty quickly, and you really don't NEED to see a high and a low to start every round (outside of setting up the field before the first round, when shooting practice, it is VERY rare that I'll call for a show target to start a round). I shoot by myself on coin-ops all the time, and usually 8-10 rounds in a session, and nearly always end up with spares on the machine when I'm done. It is VERY uncommon for me to end up with extra shells in my pouch at the end of the day.
"Some guy turned down a few targets and called for a look bird after the slow pulls."
He used more than his allotted spare targets, and basically stole from the rest of the squad (instead of stealing from the club). After he burned his spares, he should have stepped back and let the rest of the squad finish the round.
If it means the difference between solvency and insolvency for a club (which is exactly what it means for more than one club that put them in), I can't see a possible argument against it. The alternative is for the club to pad the round price to make up for the targets lost/stolen, so your price/round will likely be 2x what it is now.