I don’t think it’s how it works because I see that crap daily in footers, especially in the travel industry. Open any hotel listing on TripAdvisor and count the “[something] in [location]” links in the footer.
I’d agree With you if those links were misleading, but they usually aren’t. They really do point to pages with “[something] in [location]”. And they really are helpful for search engines looking to give useful results for that type of query.
Sure.
Sure, people still do that. Doesn’t mean that’s representative for the SEO industry.
Don't blame SEO because capitalism necessitated that businesses use whatever means possible to get their product in front of your face.