I don't know why you can't see it, but frankly they are playing you for a fool. What they do is a classic pyramid scam, albeit with signups instead of money.
I don't know about you, but I find it extremely tacky to use friendships to sell stuff (and he is selling your time and attention to that company for an invite) even if it doesn't involve money directly.
And that causes me to lower my opinion of both him and (especially) the company. Use sleazily marketing => you are a sleazy company.
But hey thats apparently just me.
Why? Most of the good products I hear about, I hear through friends. Much better than "traditional" advertising.
I'm guessing if the product itself wasn't any good, no one would bother "playing the game". The game is only there to encourage people even more.
In this case it works out fine for both parties. I signed up because I was interested in beta testing and socialcam gets to choose their potential beta testers by how social they are.
For what it's worth the system may not be very effective yet. I have one referral and I've moved from #4000 to #600