I'm a little shocked, and a little disappointed, that this is the calibre of applicants the JREF have resorted to testing.
Well, what do you expect, a "real" psychic to step up to the plate?
In the old days there were hucksters who tried to get the prize by fooling JREF. Every magician knows how hard it is to fool other magicians, but it's not impossible. I'm an amateur magician and I'm constantly fooled by other magicians, even when they work in my field of expertise. But the problem is, that these magicians would be forced to with video cameras on them, even from the "bad angles" (magician lingo for the angles which reveal the trick), and for many tricks, they know damn well it's impossible. Equally important to many magical stunts is the "preparation" (stacking decks, false shuffles, etc.) and the "clean up" (disposing of evidence or gimmicks once the effect is presented) ... when these elements are removed, the huckster knows he'll never get away with it.
Now the charlatans all abort the process while trying to hammer out the protocol. Sylvia Browne is a classic case: she knows what she's doing is a trick, and she knows there's no way in hell she'd ever pass the test. In fact the only reason why she agreed in the first place is because she was put on the spot on the Larry King show, and didn't want to look foolish. Had Randi challenged her on the telephone instead, she would have told him to go to Hell.
The Pear people fit into Sylvia's category: they know damn well what they are doing, which is passing off regular cables as if they are some great breakthrough, all to make a buck. They figured they could get good press by locking horns with Randi, and who knows, maybe they are right. If they can just spin it to appear that it was Randi, and not them, who chickened out, then they can profit from their encounter even without being tested.
So with the hucksters out of the way, there's only one category left to actually make it to the preliminaries: the poor deluded people who think they have a special power when in fact they do not. But that doesn't just include self-deluded people like Rosemary, it includes the homeopathic advocates, acupuncture advocates, and more.
I agree with you that it's a little disappointing, but this is what it's come to. Instead of interpreting that as a step backwards, think of it as a triumph: the charlatons have given up the notion winning through trickery.