YES, a compiled genealogy database such as the IGI and Ancestral File is only as good as the research completed by each submitter. Consequently, as you've correctly stated, there is no way to determine the reliability of the research submitted without digging deeper. We once participated in this program through our local LDS Family History Center. We took about 1 year to complete our assignment. This method of abstracting genealogical information from original documents is a program developed by the LDS Church.
Volunteers work through photocopies from microfilm.
All may view the microfilm of the original documents, hopefully providing a clearer view of the more challenging entries. This means that a conclusion is drawn about perhaps the lettering in a name. If not, the entries you hope for might have been part of those damaged ten pages. You'd then look for other original documents that might list your ancestor. You can imagine that by the later stages of the name extraction process, the volunteers have developed skills in deciphering the old handwriting in the original documents.