Isn't pay-per-click also vulnerable though. Couldn't you use a proxy anonymizer bot to use up your competition's click budget? It would be pretty mean, but as far as I can tell, there isn't any protection against this sort of thing. So is PPC now invalidated too?
All of the pay per click programs have systems in place to try to detect fraudulent clicks. Its been a major issue since the debut of AdWords, but the complaints from advertisers seems to have fallen in the past year, so it looks like the search engines are getting better at detecting fraudulent clicks and/or advertisers are learning to live with a certain level of them as a cost of doing business.
Google collects and analyzes a lot of data about clicks...what you described would be easily detected and stopped, the advertisers would a get a refund and if its an offending adsense user he will be banned. I look at my adwords stats all the time and if something looks suspicious, I create a report and send it to google. Sometimes I get credit for suspicious looking clicks, so far this year I have gotten back about $120...