Buying an Internship?

As a tangent to my post about being optimistic despite the state of our current economy, I read an editorial in my school paper (based on this article in the Wall Street Journal) that literally made me sick.  If you have yet to read the original article, Buying Your Kid an Internship, please take a minute to right now.

Based on the article, parents who are concerned about the job outlook for their kids are now paying for-profit companies to place them in unpaid internships.  Other parents are buying internships at charity auctions.  

One girl paid $8,000 for a sports marketing internship in NYC after unsuccessfully applying to 25 other internships.  CharityBuzz.com, a fundraising website, sold a music-industry internship for $12,000.  

Is this seriously happening?

What happened to working hard in school, paying your dues (NOT literally), and earning an internship based on your own merits?  When I said students should be prepared to do anything to set themselves apart to future employers, this is pretty much the opposite of what I meant.

Aside from how ridiculous the concept itself is, has anyone stopped to think that behavior like this is exactly why we're in a recession?  Spending the last bit of your savings (or taking out a loan? I really hope that's not happening) to place them in an unpaid position is just making things worse in the long run, not better.