I've worked for and with reputable publishers who did co-publishing/ book packaging ventures. So it's not a surefire truth that anyone who uses this business model is a sham publisher.
However, in all instances I was involved with, the co-published book was an extremely specialized non-fiction book, and often primarily intended for the clients of the co-publisher, who was usually a corporation who was publishing the book as part of a larger marketing effort rather than an individual.
I would be very wary of someone offering to co-publish fiction, especially if you didn't approach the publisher with the idea of "Hey, I've got $5,000 to spend and I think a book would be a great marketing tool for my goals."