What are the smoke fumes like?
Is it water cooled?
Can you fill with heated plastic?
Sounds interesting, except for the 2 1/2 cup part. That amount won't heat up my molds. I can inject a gallon in less than 15 minutes if I have someone demolding for me.
There is already an injection machine similar to the one you described, but at a higher pricetag. If yous can be adapted to injection, it just might be a plausable investment. Adaptability would help market it greatly. Injection could be used for so many different molds.
As far as the stickbait market being a thing of the past, I really don't think so. Just a saturated market. Simple supply/demand. 500/hr without waste even sounds great, but mathmaticly not correct for a 5 second cycle time when you include a refill of plastic. I would be in if that were viable.