I work at a "retargeting shop" and our customers test the crap out of our tools to make sure we're actually driving results. Others may use more smoke and mirrors, but when done right, retargeting does in fact change user behavior and generate ROI.
But most e-commerce retargeting, IMHO, is trading on the fact that a naive marketing manager will put too much stock in a high conversion percentage. All of those people were, by definition, aware of the product and actively shopping. Did you create a customer? Probably not, maybe by virtue of them clicking the ad instead of going somewhere else, but that's still pretty zero-sum.
Prospecting for people who haven't previously clicked the item on your site, but would be interested, is a lot harder and potentially more valuable.
All IMHO of course.
granted not every viewthrough and clickhtrough conversion is driven by the advertising, but some definitely are and it is often profitable if a campaign is optimized and run well.