I went to PW and read the article. What lines are blurring? Looks like another commercial publisher has recognized there's money to be made from their slush pile. Random House and Harlequin have already done this. Penguin is just putting a little bit more ego-stroking icing on the vanity cake.
http://www.publishersweekly.com/pw/by-topic/digital/content-and-e-books/article/46991-penguin-launches-book-country-an-online-community-for-genre-fiction.html
"Looking to support and develop writers of genre fiction, Penguin is launching a public beta of Book Country, a free online writing community and publishing services venture. In development for more than a year, Book Country offers writers a place to upload new works and receive feedback and criticism from a community of writers and readers; a place for agents and editors to look for new talent; and eventually the venture will offer a suite of self-publishing services that will offer e-book and print publication for a fee."
They want to "support and develop" genre fiction writers, alright. But the "support" in this case is a printing contract. It also says that it's a place for agents to find new talent. LOL, yes, just like Authonomy and RH's Xlibris.