The Problem with Paid Reviews is they are paid. This leads to three more problems.
1. They are fake
2. Money and Integrity can be at cross-purposes
3. Paid reviewers have less vested interest in genre preferences.
The first problem with paid reviews is that they are fake. Astro-turfing is the practice of artificial support that is supposed to look like genuine and intrinsic endorsement. It's dishonest, it's distasteful, and ultimately it is counterproductive. Fake reviews make the author that buys them look bad; it's no different than buying copies of their own book to increase their rating. The only way around this is to make the review long, detailed and balanced. This way the reviewer has to actually the read the book they're reviewing, reflect on it, and then write a unique review that can't be copy/pasted to the next paying customer.
The second problem is the Four Point Scale. I read about it on Tvtropes and in a nutshell it's about the tendency to avoid writing critical reviews/low scores to avoid cutting into their bottom line/ratings. By keeping the review positive the reviewer can keep the author happy who then shares the review, which increases the reviewer's visibility and brings in more authors. As soon as money comes into the equation, it can become a factor against reviewer integrity. When money is absent then there is no conflict of interest.
The third problem with paid reviews has to do with genre preference. When the reviewer is reviewing for money in place of enjoyment then they don't care what genre they read. Different genre have different fans; a fantasy author is writing for fantasy fans, thriller for thriller, romance for romance etc. If I write a mystery novel then I do not care about the opinion of someone that does not read mystery novels. If I was the paid reviewer, my dis-interest in a given genre might color my perception and bias the review.
Nicola Matthews is working a similar article of her own and she's going to reblog this post along with Reviews Not Endorsements which covers reviewing style.