What IS affiliate marketing?

I've been racking my brains over the last couple of days over a pretty basic question - what IS the aim of affiliate marketing?

What were the original aims when the idea of commission-based online marketing was created? Was it to harness buying power to visitors of sites that have genuine content relating to specific product types?

When I started out a decade ago, things seemed a lot more straightforward and uncomplicated - you had a website on a specific subject and wanted to monetise it by adding links and advertising to products your target users would have an interest in. Therefore, you signed up to one of the then-young networks and started popping links on where appropriate. You'd generate a small income that would cover your costs and maybe put some change in your pocket for a few beers.

At some point in the last decade the focus has changed from that to a whole cut-throat industry worth billions, but that is severely and negatively affected by an underground 'scene' that is out to generate as much money through fraud as possible. On top of that you have more legitimate sites that are there to redirect advertising budgets into their own pockets and those of their visitors whilst adding no real value for merchants.

There also seems to be a middleground of sites that are put together specifically to promote particular niches using more and more clever ways of bringing in traffic through SEO.

Unfortunately, all of these things have conspired against the sites that were in affiliate marketing in the early days. Those sites now have to become more and more about SEO and marketing of themselves to ensure they continue to generate a stable income through the affiliate model. With more focus being placed on Google rankings rather than creating genuine and useful content that isn't JUST about selling the latest gadget it becomes near impossible to sustain a decent income.

So modern affiliate marketing is a lot different now - however does it really offer the same benefits to merchants that it did in the past? Are the merchants receiving a decent stream of new customers come in through their affiliate marketing channels? Or, are they seeing the same customers they would have had anyway, but now they have to pay 5% or 10% for the priviledge?

Is there really a long-term future for affiliate marketing as it is now? Are the 'super affiliates' actually offering any real financial benefits for anyone other than themselves?