At the risk of posing some uncomfortable truths:
Who uses these services? Often those who have nowhere else to go other than your local friendly (not) loan shark Ie those with bad credit ratings.
It's the lesser of two evils. We cannot stop the demand for these devices, so better it's done via these companies. The alternative is those who will come round with the baseball bats.
Is the annualised rate high? Yes, but you are borrowing for a week/month relatively small amounts of money. Just to pay the overheads (call centre, paperwork etc, it costs pretty much the same to lend £100 as it is to lend £1000) and compensate for the non-repayers (remember, the borrowers often have no credit rating - see above) the companies will need to charge a high amount, and that is before they make any profit.
If you think thats its still high, imagine somebody lending you £20 until the end of the week which you repay and buy them a drink to say thanks. Even if its a cup of tea the annualised rate is huge.
Yes the world would be better if nobody needed them, and yes it's not a long term solution, but it is better than the alternative.