I tend to agree with you, however from what I understand, Skywatch
requires a two way communcation, where passive systems only require a
one way path. This could make a significant difference in signal
reception.

As far as "shadowing" I am not an expert, however I do know that I get
adequate reception of cell phone coverage within my car, and it too has
areas of "shadowing"
In addition, there have been several instances where I have watched
traffic descending below me, within the shadow of my aircraft, however
my VRX tracked them without fail.

I think it comes down to inginuity and determination. These guys are
obviously determined to make it work, and in my opinion I think they
have. I spoke with them on a couple of occasions, discussing the
technology. I do know that between them and their investors, they
spent a lot of money patenteting and developing this device. One of
their main concerns was preventing their competitors from copying their
work, as this has apprently been a problem in the past. Either way, I
think they have a winner on their hands........Of course the overall
judgement is dependant upon people who use it.