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Interesting thought as it would seem that human judgement would be one of the features of the original link based algorithm. I suppose democratic or collective judgement is preferred.
Once Google becomes successful, then cyberspace gets filled up with back links created purely to derail that natural 'voting' process. These back links are fuelled not by human judgement but by human greed.
Google has changed the world. To do that, they created a PR valuation system that stable, but about as fair as the feudal system of government. Now, they would like to make the formula something more democratic, because the peasants and minor land owners are revolting.
But creating algorithmic PR valuations based on 'content', backlinks, tags, and even 'performance', has major flaws that can manipulated by the clever and the well funded.
Human intervention is a great idea, but it's not scalable and its definitely not free of bias or graft potential. How much money would auto insurers for instance be willing to pay to have their link higher on the page in a Mahalo-world?
For the foreseeable future, I think that the beatings will continue, Google will continue to print money.
There are loads of sites now using Google analytics and obviously google collects that data. The good thing is that since not everyone has google analytics installed, google can't yet use this data to sort searches by performance. But once they do that would be the obvious way to sort. Those which fulfil their customers needs get ranked higher.
The trouble with that is that it squeezes the little shop owner out since they aren't able to compete with companies who can afford expensive web designers.
In some ways it reverses the playing field leveler that the internet was at it's inception