It's not a bad idea, it's not cheating, and it's not bad. And by all reports, reporting this stuff in Google has pretty much no effect.
It's a risk, that's all. These type of links work like crazy right now. Write a check and get top rankings. None of the paid blog services seem to be hurting. Seems like business is booming.
Yes, Google's staff are lying awake at night thinking how to stop it. Here's your risk as I see it:
- how long until Google can determine paid blog links using an algo? My thoughts are that it's not likely to happen any time soon. I bet there's another year or more in it yet.
- what's the effect once they figure it out. Banning? Or just a penalty that can be recovered from.
- even if you know you're going to get caught, how much money can you make from your site in the meantime? If you're going to need to spend $20K on paid links, but will make $100K in business from your site, are you willing to risk burning your domain for $80K? I'm sure there's people who've bought links who are making that 80K a month. So what if the domain gets burned in a year's time?
Alternatively, do you need to do this on your main domain? What happens if you buy an old domain and start throwing the paid links at it like crazy? Personally since I'm so risk adverse on my main site I shy away from something like this. But in addition to the financial risks - and upsides to doing this on a secondary domain there's another aspect. Trying this stuff out on secondary domains makes us think about why it works or doesn't work, how Google's going to stop it, and so on. What kind of things are detectable that someone can write a program to catch, without too much incidental damages? Testing and learning is good. That kind of attitude is invaluable IMO.
All that being said, if you're going to take this route appreciate that there likely is an end date. So you also need to be thinking how to start building your site to outlast that when it comes.