The problem is not so much with the affiliate marketing channel and more with the fact that you're, fundamentally, trying to extract money -- that is, hard US currency -- out of someone who is unwilling to pay money for your service. There are no two ways around this for the Facebook game case: at the end of the day, someone has to pay. It has to be the user, or someone selling something to the user. But the user can't legitimately buy anything. So if you're paying to advertise something to that user, you're either a) stupid and going to be exiting the market shortly or b) intent on scamming them.

It amazes me how little people who putatively work in businesses on the Internet understand about Internet marketing. I understand, given that it often resembles Satan's seedy underbelly, but if you are involved in marketing on the Internet (do you sell ad inventory? Congrats, welcome to the party) you need to understand at least this much: there is no legitimate way to extract $X from users who don't have $X to spend.

Everything else in the discussion is, like Jason from Hot or Not said, a smokescreen.

Incidentally, affiliate marketing makes the most sense for products which have extraordinarily high margins. Those are the ones in which the advertiser/vendor has the most amount of money to split with his affiliate, who then has the most amount of money to pay for traffic acquisition (by paying FarmVille or some intermediary service or buying AdWords or whatever). There are many legitimate products which have high margins associated with them -- software, for example -- but the field also tends to attract scams.

Software is actually almost the perfect legitimate affiliate good, because the margin for downloadable software is essentially 100% less transactional costs. If you don't see software offers, you can be pretty sure that the scams have taken over. Why don't you see software offers? Two reasons: you can't outcompete the vendor and affiliates (in this scenario) add essentially no value so as soon as there are two of them they'll bid away all their profits. (Edit to add: there are scenarios outside the scope of ScamVille in which an affiliate can actually add value. Ask me some other time.)

For example, pretend I offered you $15 to generate sales of my $30 software. If I had exactly one affiliate, and they paid some World of Dragonfarming Online game to give dragon eggs to people who bought my software, they might be able to pay $5 for dragon eggs to generate the $30 sale ($15 commission) and keep $10. However, as soon as I have two affiliates, the market collapses instantly, because both players outbid each other: affiliate #2 offers $6 in dragon eggs, affiliate #1 offers $7 ... somebody gets to $15 and the affiliates find themselves disintermediated. (Note that I could, incidentally, buy the eggs myself if you prove that this concept works, and I will always be able to outbid you because I make ~$29 per sale, not $15. Affiliates hate this, mostly because it happens so often.)

Do you see how the math virtually demands that there is no honest money to be made in this, even selling a good which is the paradigmatic best case for the model? That, plus the fact that very few Facebookers want to actually fork over $30 for their dragon eggs, is why the dishonest money always wins out.

Further note: the best point in the article is the one about mixing different streams of traffic together. It is like a dishonest factory which cuts their hamburgers with sawdust. (The Jungle, for the information age.)