In practice I understand this happens via citation-swapping (similar to link swapping, or paid links in blogs) and poor-quality journals accepting articles for a fee, or without review (much like paid content, or content farms) and papers that cite other articles just for the increase in rankings (similar to link farms) so the analogy to SEO (in its various hats) seems to fit.
This would suggest that the only way to fix the 'broken' citation ranking system is the same as Google, and bolt on empirically determined heuristics above the pure mathematical model of PageRank, and black-list or penalise certain journals or types of citation?