Guess you didn't know about my http://DecentURL.com -- which does more or less the same thing. Though that was inspired by a comment on reddit, not so much by a real need. :-)
DecentURL gives even more context -- it inserts the domain like yours, but also grabs the page <title> and uses a short form of that as the link part (or you can type in your own, shorter one).
While both show some context, DecentURL is not a shortener. For example, I took the URL of this comments thread and stuck in in both yours and ctxt.us:
In fact, yours lengthened the URL quite a bit. Not that DecentURL is not without its application, but your claim that it is the same as ctxt.us is not really valid. I quite enjoy the fact that this is a way to have your cake (a short url) and eat it too. (actually know what the hell you're clicking on)
You're right -- DecentURL is not a shortener. You can do some shortening with it, but its main goal is to make decent URLs, not tiny ones. So ctxt.us has it's place -- I stand corrected. :-)
DecentURL gives even more context -- it inserts the domain like yours, but also grabs the page <title> and uses a short form of that as the link part (or you can type in your own, shorter one).