Fwiw I would still choose to be a hired assassin vs being an SEO consultant. ;-)
I would rather starve than work for companies like SEOMoz. If I am a typical good engineer (and I think I am a good engineer , not a great one - yet ;-)), then I guess that confirms the poster's anecdote of good engineers not choosing to work for SEO firms. Really why should they?
My focus is Machine Learning so if I wanted to work for someone else on interesting problems in ML, I'd work for NASA/Google/NSA whoever - NSA being as "slimy" as I'd like to get. I wouldn't choose to work for SEO companies/Spam Companies/Porn companies /criminal enterprises etc if they had problems ten times as interesting/sexy (and I am sure at least some of them do).
Why should a good engineer choose to work for a company in a shady industry, given she has any choice in the matter?
If you are running your own web app startup, knowing when and how (much) SEO works (and when and how it doesn't work) on the other hand, could be very useful (as patio11 correctly points out), depending on whether you think it is the best way to spend your time.
If I were running a startup (I am not, presently) and if Search Engine based marketing were an important part of my marketing strategy, sure I'd spend some time on it (again patio11 has written some incredible posts on how to do this, thanks much!). But I'd still see it as a necessary evil rather than something intrinsically good, and I'd never work on this stuff for other people.
Getting muddy on the way to some place important is one thing, making a career of jumping into slime pits for random strangers every day is another.
Sure, asshats can use tools for evil. People get killed by kitchen knives all the time-- but that doesn't make the tool intrinsically evil.
SEO is just one more tool in you toolbox. Easy to learn, hard to master, but massively effective.
And yes, there are lots of (very vocal) idiots out there. But this type of people is in every industry. So I don't get it why so many people see them as "the industry".