I personally don't see a problem with the barracks set-up for a bettas-as-pets owner as long as all the fish are happy, have room to swim (physical stimulation), have clean, heated water and something to entertain them (mental stimulation). Even just a little plant, like potted pennywort, provides some sort of 'toy' to break up the area. However, I do think this set-up with billions of bettas negates the point of having them as pets, but each to their own.
I don't have a problem with pet bettas in one gallon tanks as long as they have warm, clean water and are being properly cared for. :) Obviously some bettas do best in these smaller spaces, whilst others won't be happy in less than 5 gallons (the little divas).
Personally, when I try breeding, it would be my dream to be able to provide a bare minimum of 1 gallon to all my fry, potentially more, which I may well be able to do as mine will be a small-scale set-up. :) I also find larger tanks easier to care for and more forgiving of mistakes.