Is it benefiting them? I doubt it. They are keyword stuffing to such an extent that they are bound to be diluting any relevance to any particular keyword phrase. PR4 (even if you can trust toolbar PR which you can't, and it's only updated about once every 4 months) is hardly stellar and doesn't tell you anything about relevance.

Is it benefiting their clients? Well there are 486 links on that page so any link strength they might be transferring is divided by that figure, (quite apart from any dilution for a lack of relevance) so that doesn't seem like much benefit to me.

Keep to your ethical stance. If you ever link to a client it will have far more benefit for them than any link from your competitor's page.

cheers