Brett pointed out in his original article 7 SEO Techniques That Google Smashed in 2007 that Google had smashed Directories that charged a pay for review fee.
In regard to Directory links Google did smash a lot of low quality Directories. I’ sure there were some paid for review Dirctories that got hit. I think that was done to Directories that were obviously built to help webmasters game Google. In reality Directories of that type only had two purposes.
They generally promoted links, pagerank, and obtaining links to get better rankings in Google. I think the other thing that stood out about these directories was the fact it was obvious the Adsense adds were more important than the directory listings.
IMHO Google did not smash paid for review directories. In fact I think Google has made it clear that they do not consider a pay for review directory as a paid link as long as the directory does not include every site that pays for a review.
For further reading:
How To Report Paid Links
Text Links and PageRank
If you want to read my other post in this series:
2007 Changes in Google Regarding Links
2007 Changes in Google Regarding Supplemental Pages