Its been my sole source of income, and its not a bad living, although I personally know people who are making $1-$10 million a year in profit from sites like this.
They're not one-man shops though, they usually have about 5-10 employees to help run everything, but its still very profitable. Digital goods cost pretty much $0 to copy and distribute, so the profit margins are amazing.
It really amazes me how a lot of people, especially in a community as open-minded as this, are quick to label everybody who has a strange-looking site a scammer. I use the salesletter format for most of my sites, and it works. I don't care what it looks like as long as it gets results.
As for the Parrot guy, I know nothing about him so I have no idea if he really does ignore refund requests. I use http://www.clickbank.com/ as my payment processor, and they handle all that. They honor all refund requests, with or without an explanation, so I couldn't even deny one if I wanted to.
I'd be happy to answer any questions anybody has about this market. It's basically an evolution of the direct mail market from before the Internet. Its looks a little strange to the Web 2.0 people here, but its a valid market.