Yes, there is always a need for them. However you will be hard pressed to get your foot in the door and make a passive income these days as you to work for it. If you have a strong presence already ie your own groups, newsletters and proxylists then you can give your new sites the kick start they need before they die off. As everyone running "networks" rotate the proxies always to keep a user interest in there groups and newsletters with the newest proxies.

If you dont have those building blocks try making a proxy and get it off the ground is going to be tough as hell none the less 5 or more. As for managing large numbers its not as hard as you would imagine. For me I just simply keep track of the day it went live and then normally I redirect off all its traffic to another site (like a network site) then I will just create a new proxy so I always have the same amount of sites running. I have 4 sites that are the pride and joys that are older and well seo'd for search engine traffic and the rest are throw away .25 to .99 domains. You will see you start going and have good foot hold then it will become really easy.