In any medium there will be free rides as new adopters take advantage of knowledge not share by their competitors. While there is always a new technology which creates new markets, this quick read does a good job of explaining why off the page optimization is more effective than on the page optimization. Chris Ridings explains "The Glass Ceiling."

Update: above link to chriseo.com/modules.php?op=modload&name=News&file=article&sid=62&mode=thread&order=0&thold=0 delinked, as the site is owned by a domainer and is a page full of ppc ads

Update 2: Linking to Archive.org version of the page here, along with a quote:

Consider each keyword phrase as being a little market economy, an interpretation we can intuitively justify by seeing the keywords can have monetary values attached to them in advertising systems. The optimizer who is working o­n o­n-the-page factors alone is looking for an economy with extremely low competition (less than 10 competitors). This economy must also provide a profitable return. The market must have practically no barriers to entry. In short, this optimizer would be looking for a newly emerging market or a niche (a forgotten keyword). What we begin to see is that our solely o­n-the-page optimizer is less of an optimizer and more of a researcher and opportunist. That is no negative statement, being such is a skill in and of itself. However, we can also see that should they prove successful then their very success is an indicator to the competiton that this opportunity exists. i.e. people will wonder why they do so well and begin to analyse it more in depth. Thus, given time competition will form and them will become an attractor to competiton. Sooner or later they will have more than 10 competitors and the opportunity no longer exists.

Given increasing usage and competition o­n the internet we can say two things: that the quantity of such opportunities is likely to decrease and that the period of time for which such opportunities persist will decrease.

So it is, wisely, arguable that o­n-the-page optimization is a short term, unsustainable option without off-the-page optimization. It also follows that such optimization will often, but not always, be the least profitable in terms of results.

Ok so we all need to have a little fun now and then. As I stated earlier I have been trying out some of the directory script software.

Here is a fully functional tounge in cheek directory I titled "Black Hat SEO"

Thanks Bob for telling me the origin of tounge in cheek.