So are Nielsen's TV ratings panels, but advertisers don't seem to mind. Of course, there are a lot more Web sites than there are TV channels, so it's easy to see why the TV-ratings approach might viewed with skepticism on the Web.
I think there are bigger problems than the size of the ratings panel, though. A few years ago, FORBES reported on how About.com had subverted the MediaMetrix rankings by buying HTML popunder windows as ads. MediaMetrix counted the popunders as visits or pageviews. (Come to think of it, X10.com ranked as one of the "most visited sites on the Web" for what I assume was the same reason.)