Let's address the question of "putting the slush pile online." In some ways this is very similar to what Del Rey (a spec fic imprint of Random House) did over a decade ago when they started the Del Rey Online Writing Workshop. That effort moved out from under the Del Rey aegis to become The Online Writing Workshop which specializes in science fiction, fantasy, and horror. Unlike some other sites, it charges an annual membership fee, but it's very well run. And it has given a lot of spec fic writers a leg up—Karin Lowachee, Charles Coleman Finlay, and many others.
The difference in the current Random House effort is, I suppose, that Random House says their editors will look at the top entries after they have been peer-reviewed and rated. In some ways, this is closer to the Amazon Breakout Novel Award, where they promised professional feedback in the form of Publishers Weekly critiques.
You've got to give Random House credit for not wanting to miss any gems in their slush pile. And for trying yet again to make the Internet work for them.