A surprisingly large number of people knew about this fic through the Rainbow Dash Presents parody, to the point of thinking Aurora Dawn was ripping off "Captain Hook the Biker Gorilla". The creators of the latter attempted to rectify this by crediting Aurora Dawn every time his characters were used in other videos and linking to the original fic on his blog.
The BronyDancePartyFilk Song has over 9 million views, making it more viewed than the original fic. It's especially this amongst younger fans who used Youtube but didn't read fanfics.
Glaze's original song this fanfic is based on, and most of its remixes.
Its sequel song Awoken, a collaboration with H8 Seed, is no slouch either.
SlyphStorm has written a magnificent tribute to Rainbow Factory, based on the fanfic and it's sequel and referencing the original song. Appropriately enough it is called Pegasus Device.
Even Better Sequel: While not as well known as Rainbow Factory, Pegasus Device has been praised by readers for going into the past of the factory and giving more motivation for the villains.
The only reason Fluttershy was alive to become the Element of Kindness was because a worker voluntarily sacrificed himself to become Spectra in her place. Imagine if he hadn't.
Even that spoiler gave some info about the exam: The flashback stories of The Cutie Mark Chronicles happened two days after Fluttershy's flight exam. That young.
Which means ponies that don't have cutie marks could have failed the flight exam. Imagine knowing you're about to die without finding your special talent...or worse, realizing that your special talent is becoming Spectra. (Though, what WOULD that cutie mark look like?)
Rainbow Dash: Of course I do, darlings! If I don't know all about rainbows, who would?
Pinkie Pie: Do you know how they're made?
Rainbow Dash: (uneasy) Ah, well, darlings... there are some things we're not supposed to know!
It's made all the more comical given that it's Pinkie Pie asking Dash that.
And it's Hilarious in Hindsight in another way too. In-show the ancient pegasi are compared to the Classical Greeks, especially the Spartans, who were quite proud of their laws mandating the destruction of'unfit' children. Think about that and read the story again.
The song, by virtue of not elaborating on the exact nature of for-mentioned 'fears and horrors', is quite compatible with the 2013 horror movie The Purge. To an extent, the fic is comparable for the shared plot-devices that the main targets of the murders are the less desirable parts of the respective societies (the poor in The Purge, the weak in RF) and that it has at least been suggested that they harvest the bodies from The Purge for power or some such thing.
Many businesses in real life use Rainbow Factory as their name, most notably, a sandal store in San Clemente, California. Have the song and fanfic boosted its popularity?
Misaimed Fandom: Some readers of the fics agree with the villains or believe they are in some way justified.
Considering that the basic premise is essentially "Soylent Greenis PONIES!", it's liable to cause a few snorts if you refuse to take it seriously. And that's not even mentioning the fact that the CWC takes making rainbows as such Serious Business that they're willing to implement Nazi-esque policies that target literal children.
Rainbow Dash's bouts of severely Out of Character behavior, such as cocking her head back and bellowing out an Evil Laugh.
LinesPrower's What Rainbows Are Made Of seems to have been written for this reason; it reveals that the events of the fic were simply a nightmare brought on by Scootaloo's anxiety over her test and fear of failure.
Every single adult pony they meet being EXTREMELY cruel to our three heroes.
Visual Effects of Awesome: The animation of both PMVs is extremely impressive, particularly the "Cloudsdale Weather Corp" screen at the beginning of the "Awoken" PMV and the slow-motion shot where H8_Seed bucks Brony Dance Party off the ledge.