If a woman has six dudes paying her attention you don't want to be the seventh guy that is sweating her.
This approach doesn't mean that you never ever talk to her, it means you let her choose you. You don't have to be rich or extremely goodlooking for it to work but you do need something that raises their interest. Woman are used to getting approached and when an interesting man doesn't approach them, they wonder why. They start to fear that it might be because something is wrong with them and in order to convince themselves that nothing is wrong with them they start to pursue you.
That doesn't mean that approaching woman doesn't work though. It's probably a matter of personal taste and personality. So far it has worked for me. I'm also pretty disinteredted in people I don't know and it is rare for me to get interested in a woman just by looking at her, so naturally i'm less inclined to randomly approach females. As a result I mostly end up with those who pursue me instead of the other way around, because while they pursue me I get to know them better and start to get interested.