Week 10 muddy point

With regards to link analysis and page ranking, I was wondering about Google. I seem to recall that people can pay to have their websites ranked higher in the Google results pages and within the past 2-3 or so years, the sites at the top of a Google results page are commercial sites. I guess I'm confused because doesn't this sort of defeat the purpose of link analysis if one can just pay for a higher ranking even though the site isn't good (low back link amount, for instance)?