On the buying side, I've seen how hard it is to wade through the reviews to buy simple products. Though I would say that it's mostly recently about product quality rather than review quality.
On the seller side, the issue is that when you launch a product and have no reviews, you won't get sales. Without reviews and sales, your product slides down into the depths of Amazon. Without the ability to give away products for reviews, we are only left with waiting for reviews to come in naturally or paying a lot for Amazon PPC to continuously force the product to the top of the stack hoping to generate some sales and then ultimately reviews.
There has to be some sort of middle ground for this sort of thing. I would think there has to be a way to launch on Amazon that can get products out to real reviewers, and still somehow weed out the "fake" reviews. It's telling that they didn't remove it for book sales as pre-release reviews are so entrenched that they didn't dare mess with it. If it's working for books, in theory, it should work for other categories.
Of course, Amazon does have a way to do this legitimately through their mysterious Vine program that you need to be invited to. Though it doesn't seem they really have a direction or know how to handle the issue themselves. For the time being, I can only assume that this will drive the review sites underground.