If we assume that it's Google's mission to catalogue all of mankind's information in some discernable way -- then maybe  directories should be a 'specific search'. Google should place a DIRECTORY link at the top of Google along side IMAGES, NEWS, SHOPPING and GMAIL. Why?

Think about it this way.

Say you walk into your local library looking for a book on 'Nutrition for Cancer Patients'. The library catalogue computer tells you to go to section 600, row 7B. But when you get there entire shelf is filled with reference books pointing to other sections of the libraries.

If I want 'references' - then I will browse the reference section. But I don't want 'references'...
I want RESULTS.

I imagine this could also give Google a valid reason to crush their Ad Words competition without being preceived as 'Evil'.

This will also give Google an opprotunity to get rid of all the spammy, useless directory sites that create directories for the sole purpose of running Ad Sense programs.

Well said! I have always stressed that at the heart of the matter - (its content - content - content). A well organized website and linking structure is much like a public library. Let's say the public library computer tells you that all books on 'skin cancer treatments' are in section 800 rows #7. - You walk to that section only to find books on 'skin beauty treatments' or 'multiple directory books with skin cancer treatment listings noting information listed in other libraries. Hey, that's no way to run a library!

To quote an talented SEO I know, " Do what you say, Say what you do and do it well".  

Speaking of 'directories'. This opens another can-o-worms that burns my biscuits.

I think the search engines should add (DIRECTORIES) as a separate search. So on Google's homepage you would have this - "Web, Directories, Images, Maps, News, Shopping, Gmail, more". Large directories inherently have an unfair advantage over individual websites. Let's level the playing field folks.

I saw this news tidbit months ago. So I said, 'what the heck, as a owner of a web design and database development company I already facilitate getting my web clients signed up to Google local. I charge nothing for this... it's part of my value added services. I might as well earn some lunch money in the process so I signed up months ago. I rec'd no email, no contact, no joy from Google. I expect payments from Google for services rendered will be about the same.

A few months back I read an article that featured an interview with Google founder Larry Page. -- Herer are some excerpts;

How Google Determines the Importance of a Web Site
"Every time you create a link," Google founder Larry Page told the hushed audience, "you’ve created a citation. But if you just try to count citations on the Web, which is what a lot of search engines do, you run into problems.

"The important of a web site, particularly a web page, is based on the sum of all pages linking to it. That if Yahoo linked from their homepage to your homepage that’s a big deal."

Based on this simple linking-citation system, people have set out to game (trick) Google into thinking that their web site is more important than it really is. Other spamming tricks include link-farms, 2-3-4 way linking, dynamic IP spoofing and so on.

The important thing to remember is that Google has always identified these problems early on thanks to the legions of webmasters who troll the Internet on constant alert to any flux in the Google search results. Spammers might enjoy a high-rank for a short time but this will be merely a blip on the ranking radar.

Google's answer to this is, "We employ an ever dynamic, ever-changing way of measuring the true importance of a web site". This is why I have continually stress that webmasters should build web pages for users and not search engines. And if you trade links, trade with web sites that you feel would be of benefit to your visitors.

It’s as simple as that. If your web site has been constructed using ‘best practices’ established by Google webmaster guidelines, and not trickery, you should be able to obtain a respectable ranking in Google and the major search engines.

NOW PAY CLOSE ATTENTION TO WHAT MR. PAGE HAS SAID HERE, 'dynamic, ever-changing way'.

To coin a new phrase,'He who builds his business on search engine results, builds on sand'.

One small 'Google Quake', and the entire building comes tumbling down.

With each new website my company develops - I warn my customers not to solely depend on Google or any other search engine to bring them new business, but rather spread their ad dollars around.

IN SUMMARY
Organic SERPs + PageRank = Free Lunch
(There's no such thing as a free lunch).