I wonder how much of it is from the long tail. I know small non-web savvy businesses that happily pay $1-2k a month to outsource their SEO, as business from yellow pages continues to decline.
I've seen businesses in yellow pages using questionable tactics as well, especially in the over-saturated areas such as Taxi's and moving businesses. A lot of the businesses advertised are actually one business, and they often have business names like "AAAAAAAAAAAAAA Taxis" (this is usually found in small writing at the bottom of the advert).
It's gaming the system but it obviously works. Same can be said for SEO.