I think it's a bit more complex and gray-area when you need a model release, even for commercial publications. The canonical "need one" example is using someone's likeness on a billboard to sell products, or on the label of your product. The canonical "don't need one, even if use is commercial" example is newspapers publishing photographs taken in a public place as part of an article. For example, you don't need a protester's permission to publish a photo of them at a rally, even if your newspaper/magazine sells ads and is for profit.

There's a lot of in-between area, though. This site doesn't seem to be clearly using the photos in the model/advertising sort of way; they're not using them to launch a line of public-transit-rider products or putting them on tshirts or something. It's definitely a step down from journalistic reporting, but I could see it arguably falling closer to that than to the usual cases where model releases are needed. You could imagine a genuine reporter running a story on fashion trends in different demographics or something, illustrated by a few photos taken out in public, and this is basically the half-assed, mean-spirited tabloid version of that focusing on one particular demographic.

(Though as far as AdSense in particular goes, Google can of course make up any rules they want.)

You don't see newspapers vindictively replacing all of their content except ads with a humiliating photo and a mocking, false story about their subject.

I agree, but that's more a question of whether it's valuable/interesting/trashy than a question of whether it's promotional modeling use, isn't it? This just doesn't look like the kind of uses that model releases are normally required for.

You generally, at least in the USA and UK CAN use a person photo for commercial use without their consent - otherwise crowd shots of a game would be impossible, The only limitation is that you cannot imply they endorse a product unless they do. Even then a shot of them actually using a product - a celebrity with a can of your soda in their hand, would be acceptable as reportage.

Ah. So if you have blog with ads and you use (say) a photo from flickr, your use of the photo is deemed commercial? ie: Use of ads indicates commercial intent?

The value of a blog is the writing. They don't really depend on the one photo they use. The "value" of the website in question is that they get to laugh at photos that you can't use commercially. Without the photos, the website is nothing. A legal battle around this question probably depends largely on the lawyers arguing about where the value of the commercial entity derives from.

To get a real answer you'd have to ask a lawyer. But my intuition is a blog that uses one photo per post in fine, while the website in question is not fine because it requires the photos to even exist as a website.

I don't think there's any legal requirement on text:photo ratio; photojournalists' blogs that are nothing but streams of photos of people in public places haven't been required to get model releases, and are probably protected by the first amendment. Granted, most of them are more legit journalism than this is.