That's how it works some of the times. I'm not saying you're wrong. This is just another way to get out there.
Every independant artist should be a promoter of themselves. I don't even feel the need to argue this, because I really don't think it's worth argueing. I agree with your points. It is 'pimpin'' as you put it. But sometimes, it's gotta be done.
If this person proves they can bring 30 people to a show, then maybe their net worth will raise next time somebody is looking to put one on. You can either take advantage of this opportunity or not... this is not a career maker, it's just a step you can choose to take if it feels right at that point in time of your career.
Sometimes, you gotta hoe yourself out. You get breaks by putting yourself out there. Who's to say doing this show won't lead to bigger and better things? Is it really all that hard to sell 30 tickets and cough up $50? Maybe that's the initiative that somebody needs to see, before they start believing in you as a promoter of your art.
You have to be out there, in the public eye in order to get major attention. This is just one way to do it.