Although it is carrying digital signals, USB is fundamentally an electrical system that relies on voltage changes as its underlying mechansim. Since all wires have electrical properties such as resistance that are proportional to their length, the answer is yes, you do risk signal degradation if you exceed the specified performance envelope.

The USB 2.0 standard specifies a maximum cable length of 5m/16ft (so the simple answer to your question "how long is too long" is "longer than that") however the standard allows for this to be extended (up to 5 times) by inserting a USB hub. As it says in the description, this cable just has a bus-powered hub built in, so it looks like a perfectly valid solution. No snake oil there.

As with most communications protocols, USB includes a CRC check to ensure data integrity, however while CRC is very good at catching the sort of random errors common in data transmission it is effectively a statistical mechanism and doesn't guarantee data integrity. It is most likely that any data errors that do sneak through will manifest themselves as a noticable click or pop.

Timing errors are a far more complicated subject. USB connections can suffer from quite high levels of jitter or very low levels depending on the way the manufacturer has implemented the product (if you don't already know more than you ever wanted to about this subject my advice would be to ignore it - ignorance is bliss!) I think the simple answer is that either way this cable is unlikely to make a significant difference and for $22 I don't think you have much to lose.

I can't see any reason to recommend against trying this cable. Good luck!

IIRC, the Transparent (?) USB cable AD recently reviewed claimed lengths up to 50' with no loss!