Thanks Faglork for your thoughtful reasoned comments here and elsewhere. Faglork posted a very helpful Matt Cutts quote at
http://www.webproworld.com/viewtopic.php?t=55705 .
My understanding is that they manually ban people based on flags by the spiders or from complaints.
At the same time, the example you show Greeneagle is such a lame obvious attempt at spam. It would not be hard for Google to see that the text is the same color as the background. Was the same-color-text/background penalty ever hard coded or has the threat of manual banning always been the deterrent? You'd have to show me more examples before I'd attribute it to Jagger.
The real spam pros are using techniques much more complex and impossible to detect. As futile as it seems, I still think manual penalties must be at work.