After selling an app on the app store for a couple months (and climbing pretty high in the rankings), I'm convinced the app store is corrupt in the following sense.
Most of the 5-star reviews you read on the App Store are fabricated. It's pervasive, every successful app does it, and you basically need to assemble a review posse to compete at all.
In the end, the good apps filter to the top, because even though you can arrange good reviews, once you start selling apps fast enough you will get bad reviews that will drive you back down.
But still, you need to rustle up or manufacture reviews on each release to get in the game. You can immediately increase sales by doing so, and so everyone does it.
The result is a competition that encourages dishonesty, and people end up buying apps under false pretenses - because everyone doesn't know the 5-star reviews are all fake. I think Apple needs to take some steps to clean this up.
Obviously, Apple doesn't care about this today. You can tell because there are no controls or anti-gaming technologies in play here. Also, Apple has no interest in rooting out fake reviews (which increase sales temporarily, but on a regular basis, like a heartbeat).
I agree with you that everyone, I mean everyone asks their friends etc. to post 5 star reviews, and we did that too initially, but not anymore. We did it initially because competitors were posting bad reviews and we had to counter them.
I think the solution to it will be if the appstore review becomes a threaded discussion board in which developer can post comments to any reviews and everything is attached with an email. So, if a user posts a review and a developer replies to that review, there should be an email sent back to the reviewer stating the developers comment. And there should definitely be a system in place where any review posting on any store front for all the apps by the developer of that app should be alerted by an email. I have a lot more suggestions of improving it, which I will post a blog upon on our website soon.