Jammin' oldies formats actually do rather well in California and parts of the southwest. They tend to appeal to a cross-section of Hispanic, black and white audiences. Denver does have the cultural demographics to make it work. Farther east, where audiences are more racially fragmented, it's tougher to program a JO station, especially when there's an urban AC around that super-serves the black audience.
If you look at the ratings of XHRM, you'll see that this format - when done well - can be very successful.