Yeah but then most online places are going to require the extended information number, or a street address and other info which isn't on the card's magnetic stripe.
I suppose these guys could be setting up their own merchant accounts and finding providers who don't require this info. Or even creating fake cards and then using those. Both of those options seem a bit riskier to me...
Also, you would think these organizations would have enough money to produce something less sketchy. Was it attached with masking tape?