I'm in the UK and just done a local search (keyword + town) for a term I used to be number 1 on.
I am being beaten by a site from a different country and an advert for a personal trainer. I am not a personal trainer.
With so many stupid results like this, they are going to need to tweak things or become the new Altavista.
Ultimately, their job is to get good results. The order is irrelevant as long as someone searching would be happy with anything in the top 10. God knows what they think they are achieving at the moment.
My "if I was google.." idea to stop spamming would be to give a small temporary punishment for every spam link they find. That way, any link building campaign is going to push a site down the rankings (though without crippling them), and it will be hard for any SEO to explain to a client how their work has caused that to happen. Any link building would have to stop before the site rose again.