I agree completely if we're talking about a recommendation engine that's supposed to always be able to find something of immediate interest for you. However, that problem is at least as hard as building a general AI, since not even my friends can always think of something I would find immediately interesting.

If you relax the scope of what you want a recommendation engine to do, they can do an awful lot. Directed Edge is absolutely killing it here -- http://directededge.com/ . By providing a white-label API so that developers can specify the data on which to base recommendations and by using some superior algorithms, they're able to come up with impressive results for recommendations like "People who might like to buy this might also like to buy this", or "These users might be your friends", or "You should read this other article."