I have yet to see an article that accurately describes the real problem with current PFI programs.
And that is this:
Paying a search engine on a per click basis isn't PFI. It's PFT. (pay for traffic).
I don't think there would be any consumer rebellion to true PFI programs. I pay you a flat fee, and in exchange you crawl my site on a regular, scheduled basis. There is absolutely no conflict of interest there.
But paying on a per click business is a whole different thing. There is no way most xml based content can compete for rankings in a natural algorithm that utilizes any king of link analysis. In order for the search engine to make money, they must fudge things so that the ppc content shows up where it will get clicked.
That creates a huge conflict. And it completely destroys a search engine's ability to compete in any type of integrity war. Neither webmasters nor the general public are stupid enough to believe that ppc content is treated exactly the same.
In Yahoo's case, I think they will ultimately come to realize that their decision to try and combine PFI and PFT into a single product was extremely stupid. Their competitors will continue to bash them to the media, and the media will continue to do a crappy job explaining to the masses the differences between true PFI and PFT.
The end result will be that Yahoo will have to scrap both in order to save face. If they wouldn't have been so short sided in there thinking and simply released SiteMatch as a true PFI program, I don't think we would even be having this conversation.