If you look at the simple physics of it, these radiators are about the same size as a typical heatpipe/120mm fan tower heatsink. The water just moves the heat from the CPU to the radiator. Since the radiator and the tower heatsink are fairly similar in size, they're going to be fairly similar in performance.
These self-contained watercooling setups have the benefit of some mounting flexibility, at the cost of some increased complexity and the extra power draw and heat production of the water pump. You shouldn't see massive differences in performance either way - think of this as a remote-mount version of a 120mm heatsink.
I've had the similar ECO A.L.C. on my overclocked i7-920 for a while, and am completely happy with it. I'm considering picking up this H50 just because it's so cheap, even though I don't have anything in mind to actually use it.
I would disagree with your premise; as I have two similar setups: One with an H50 and the other with a conventional 2X 120mm cooler and the H50 definetly keeps the CPU at a a lower temp.
What you may not be taking into consideration is that a conventional setup is passively transferring the heat away from the CPU, where as this platform (if setup properly: away from internal heat sources and with 2X fans, for push/pull air flow) is actively cooling off the contact plate.