If it works, how's it stupid?

Public opinion is not always synonymous with right/moral/good/whatever.

So from a subjective point of view, I would agree that it is a stupid point of view. And I actually think that a poll of gamers, not just TF2 players, would give you the same answer.

However from a business point of view, certainly not a stupid view, since (as you said) it does actually work.

Depends what you're trying to judge, the concept for gamers or the concept as a business plan.

TF2 public games turned into constant trade for goddamn hats and metal.

When people make comments like this, it makes me think you've never played TF2.

I have never had a problem where a number of people on a server are trading (except on dedicated trading servers).