It's my interpretation that a terminal masters program can be good for those who don't have qualifications to get into a top tier phd program. You can develop those qualifications while working on the terminal masters, then apply to a phd program.
If you have a masters that wasn't from a terminal masters program, I think it's like the kiss of death. It only shows that you couldn't get the phd.
But a respectable terminal masters program (e.g., LSE, UM) can be a good stepping stone to a good phd program.
At least that's the approach I'm taking!