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When they slipped a few positions, they probably bought some more, and the red flag went up.
I remember viewing a demo for some link software, where they actually use SI's website as an example showing the magical formula and analyzing their links.
Its pretty obvious what these guys were doing. They were exposed.
I think the real news is that anyone would WANT to rank for seo terms in the first place.
It's the first thing newbies look for when they've been burned by a failed SEO company, or just find about the industry and want to be number 1! ;) Meaning that there is a huge amount of business to be had - anywhere from 6 to 7 figures monthly.
I find the constant banter against ranking for SEO terms quite strange - yeh, it makes you a larger target and puts you directly in the limelight, but if you've nothing to hide then where's the problem?
It's no different than operating a big brand business that is under constantly media scrutiny - deal with it properly and it can be hugely profitable.
The moment you do anything from collecting links to putting a bold tag around your pet keyword you're blacker than coal.
I agree to a certain extent, but I think there is a lot of SEO stuff that SE's would be happy to accept (good highlighting, spiderable pages, etc) and other stuff they never will (spamming). There is a difference - not really the huge ethical issue that some may make it out to be though.
No delusions of what we do for a living though - we are indeed artificially enhancing a websites ranking and Google know it. It's just how far we push the boat out that dictates how well tolerated (in the SERPs) we are.