For an example (which was submitted as search feedback a month ago), try searching for "XMPP load balancing" and look at the third organic link.
Short version is: they used to, and got busted for, serving answers to the spiders and ads and pitches to the surfers. So now they show the answer at the bottom of a pile of ads and pitches.
But they still suck. Horribly. And are the number one example I hear when people say "I wish Google would let me blacklist domains".
Edit: Even a GM script to remove all the leading spammy divs would do...
On Chrome you have Search Engine Blacklist
On Firefox you can use the filter option of Optimize Google
The indexed content is blurred out and there's a big ad overlaying it, with no close button or other method to display the content, other than the Google cache link.
Clicking the link again shows the additional content at the bottom of the page as you described. So there's some other algorithm at play.
Do you consider that site to be a quality & non-spam source of information?
The question is one of rankings. The only time there is a problem is when a spammy site ranks above a more relevant site for a particular search. If I enter a very specific query that only hits a spammy site, then I should see the spammy site, because it's there. Google is a search index, not a "visitors guide to the internet."
If they're serious about their standards, they would remove Mahalo en masse from their index.
edit: Or, to satisfy lukev, they can keep the index as-is but make sure Mahalo pages never rank high in results.