Basically this scheme uses variable offsets, but it generates the bytes on the fly. They aren't truly random, but there aren't any obvious patterns and the output passes all the NIST tests.
Since a simple password can be used to do the de/encryption it is much easier to hand off to the recipient and any good password generator can create one.
Since only part of the generated sub keys are used, it becomes very difficult if not impossible to reverse engineer the sub key to find the previous or next sub key.
