>> it points elsewhere which again brings up my question how does the user land on the direct domain page?
@anantj - I think the answer to your question is Search Engine Results. for example, If there is text on a page and the brand name is referenced several times on the categories or potential uses for the name, given BrandBuckets ranking well overall by Google, it is possible (likely) that the BB skeleton landing pages of prior names that were sold would show up in a Google Search Result. Although not high on the page, but still a little bit of free "buyer interest traffic" is better than a 404 dead end.
The value of this to BB is that if the individual searching the web for a specific name (brainstorming or potentially mashing up words to see what shows up live on Google) and then BB happens to rank on page 1 for the name, it is possible the individual who is surfing might click on the link. Then once seeing the name has already been sold, might glance around BB to see what similar names they have available.
That's why leaving a 404 is a bad idea and putting up splash (skeleton) pages indicating the name has already been sold (oh and by the way here are 3-4 other names that might work for you) is a smarter strategy.
YMMV.