I would say that Z100 is, indeed, bland, but not as bland as the cookie-cutter CHR's across the country. But Z100 definitely plays it "safe" to a great extent as well.
The mistake people seem to make about 87.7 is that their audio is not really "TV audio" even though they are the audio portion of the Channel 6 VHF frequency. They have full FM modulation. However, the signal is obviously significantly weaker than Z100. Despite that, while I can't see them competing with any of the big boys, they might get enough of a following to shave a small portion of the audience from stations like Z100, Hot 97, KTU, etc. If they can generate a buzz on the streets, and get a loyal audience, even if it's small, then they will have succeeded in what they are trying to do and what their advertisers would likely be looking for.