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I've seen it done somewhere - can't remember where - and it only works with unique content on every domain as well as on the main site, and you often end up ranking higher on the domain than the category, but that shouldn't matter.
And like CaptainWolfy said, you still need backlinks for all those domains.
I've also seen it done another way, with free hosted blogs in long tail versions of the category on the site you are linking to. That often works better because the backlinks are coming from other IPs.
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