It is an over-saturated market thus I believe it has lost all meaning. It is an intellectual exercise which does nothing more but supplement the traditional skills of programming, marketing and copywriting.
Seo on it's own (as in a service pitched externally to third party clients) is just not necessary. The returns are too small for a Mom and Pop to accept it as the sole service being provided. It detracts from the more important aspects of traditional skills.
Add to the fact that if you do not have 3 years professional experience in each of the traditional skills mentioned along with things like business networking, design, multi-media, usability, whatever you want to call it really... Then the
seo service in question 99 out of 100 times is worthless.