I think the first two posts contain a good amount of truth and explanation.
1. It is cutting out the affiliate.
2. Things still work out for you if you can do more volume than you did before under the previous conditions. The catch though is that you need more traffic than ever before. If you have 100 times the traffic you did in 2005 then you are still more profitable today even if your CTR is 1/3rd of what it used to be and your conversion ratios are double or triple what they were in 2005.
Now here's why it's bad for most people in our industry.
1. Obviously this is bad news for affiliates. That's obvious.
But it's also bad news for everyone else other than those who are increasing gaining traffic and consolidating market share. Why? Because as the traffic sources consolidate Capitalism dictates that those needing that traffic such as sponsors will meet increasingly unfavorable terms. With affiliates the traffic was broken up among thousands or tens of thousands of people. You had many options. Now (or soon) you have but a handful of options and if it follows history the deal will become worse for you over time. I'm not even going to speak here about the devaluation of the product or how the loss of affiliates and competition hurts other businesses such as domainers and script writers. But it does.
2. This is great as long as you can keep increasing your traffic at a rate higher than the decline in CTR and conversions. But how long is this sustainable for you? That is the question. And the points I raised above also come into play. If a major source of your traffic suddenly wants 30% more from you and there are no other options what other choices will you have? You have to keep that volume to make it worth it for you otherwise you will lose money.
I'm just an affiliate who has been in the industry over a decade. But I used to own a small sponsor program back in the day. I don't know everything but this is honestly how I see it.