I don't disagree with the affront that a 3% fee imposes...
However, until the current credit card default crisis lightens up, otherwise "creditworthy and reliable" credit seekers who had their limits frozen or APR jacked may very well be willing to pay the extra 3% in lieu of frozen credit elsewhere. I suspect that this is a temporary phenomenon, and when the crisis passes, 3% is gonna look awful to anyone. But I bet right now there are still plenty of takers, not all of whom are "desperate" in the traditional sense, just squeezed. They will still pay their bills, but they have run out of room to borrow with traditional sources, or need to cut rates asap. Others will go beyond their means to repay with another loan, and croak out, the 3% won't be much of a factor in that.
Prosper needs to milk that 3% while they've got it, but also be proactive in phasing it down when credit options become more widespread again, if they wanna stay viable for the reliable bill-paying masses.
So I find it distasteful, but I also find everything distasteful this year.