Verizon isn't redirecting web page queries that fail - they're redirecting DNS queries that fail, and that's a serious mistake technically, because DNS supports all applications, and doesn't know which one you're using.

If you try to send email to , your mail system checks DNS for the IP address of nonexistent-domain.com, and Verizon's supposed to tell it that the domain doesn't exist, so your mail reader can give you an error message. Instead, it tells your mail system to send the message to Verizon's web server, which might or might not have an email server on it, and maybe you'll get an error message right now saying "joe doesn't exist here", but more often you'll get a message next week saying "we've been trying to reach nonexistent-domain.com for a week, giving up, sorry", and meanwhile joe's been waiting for your mail and you didn't know it.

Even for web pages, redirecting DNS also doesn't redirect missing pages on correct domains - if you look for www.example.com/missingpage.html, and www.example.com exists and has a web server, that server will send you "404 Not Found" response page, and Verizon's not looking at the query or response there. If you look for www.nonexistent-domain.com/whatever.html, and Verizon correctly told you the domain didn't exist instead of giving you their own web server's address, your web browser could give you an error message, but most web browsers these days will let you pick whatever search engine you want to do the lookup, so if you like Google better than Microsoft or Yahoo you can use that.

Verizon could implement a web proxy server that would actually redirect your HTTP query instead of giving a wrong answer to the DNS query. Some ISPs and most business firewalls do this, because it lets them save bandwidth by caching popular web pages instead of fetching them every time, and also lets them run virus filters. But that's much more intrusive, and requires much bigger servers - hijacking DNS queries isn't any more work than answering them correctly, and they can afford a big web server for the typo traffic because they're making advertising money off every query.