I also scratch my head at how Betterment can make it. Certainly Betterment is better than going to a place like Merrill Lynch or Ameritrade, or just buying whatever "Mad Money" Cramer screams about the night before.
But once any investor discovers why the Betterment portfolio is a good one (low-expense passive index funds), then you've cracked the code and now you you're knowledgeable enough to construct a comparable one-fund portfolio at Vanguard with a target retirement date or LifeStrategy fund. In other words, anyone smart enough to buy the Betterment spiel is smart enough to do it on their own for less.
I do recognize, though, that I and a lot of other people on this board are very analytical and motivated about these topics (we are, after all, reading this on a personal finance website with a disproportionate number of engineers), and not everyone else is equally so. If Betterment can save a few people from places like Edward Jones (where you'll lose 5.75% of your money off the top from commission loads, as well as getting put into expensive actively-managed funds AND pay 1% annually in management fees, plus other fees), then that's a good thing. If one of my clueless relatives asked me if they should invest at Edward Jones or Betterment, I'd tell them to go to Betterment in a heartbeat.