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Certainly traffic based ranking would be much less convoluted than rank based on backlinks and much less amenable to manipulation.
Looking at Alexa data one can see there is a high correlation between Google PR and and Alexa traffic rankings for high PR sites. But for sites like mine, with mid range PRs, there is little correlation between PR and traffic rank.
Is backlink ranking just an interim step while toolbar usuage increases and more traffic data is available?
Certainly traffic based ranking would be much less convoluted than rank based on backlinks and much less amenable to manipulation.
Actually, traffic ranking is far easier to manipulate than link pop.
There are traffic brokers that will sell you millions of visitors for pennies on the dollar. Of course the traffic is untargeted and mostly worthless, but it will make your traffic rankings look disproportionately attractive.
You can bet that if traffic ranking ever came into play, this and a hundred other new techniques would spring up over night to exploit it.
Bookmarked traffic and link clicked traffic is worth a lot more than img src traffic and so on.
There are certain industries that have lots of traffic and little PR and vice versa.
No one factor should be given too much weight. Google is always working on new stuff and mentioned traffic - mostly in passing - in one of their early papers.
There are many things that could be done to make google better, time, money, space, and computing speed are limiting factors. If google spends x amount of time looking at factor z - that means they have to spend less time on something else.
Certain things like traffic they may have decided have such little correlation with quality as to not be worth the time.
Just keep in mind - if traffic was king instead of PR - x10 would be king of the hill.
