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"I believe in post-publication peer review because it reduces the costs and time wasted in bringing work to community view and because it makes the filtering and quality assurance of that published work continuous and ongoing. But in the current context it offers significant cost savings. A significant proportion of published papers are never cited. To me it follows from this that there is no point in peer reviewing them."
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"[H]ow about another contest? Here it is:
Predict the lowest close of the Dow Jones Industrial Average occurring on or before January 1, 2010. Trading during the day doesn't count, and it doesn't matter on which day the minimum occurs. Just the value at the close."
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Mmmmm..... Cheese....
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"Hardy was found to have violated the university's honor code because he created "Men on a Mission," a beefcake calendar featuring men in the Church of Jesus Christ of Latter-day Saints. That action was not consistent with the honor code's requirements that Hardy live "a chaste and virtuous life," according to the letter denying Hardy's appeal."
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Cameron at Science in the Open is worried about the possibility that the present peer review system is in danger of breaking down. That is a concern I have also had: refereeing is something that by its nature cannot be explicitly rewarded, and it takes time away from other duties like research and teaching.
He also touches on an important point in the passage you quoted: A significant proportion of published papers are never cited. To me it follows from this that there is no point in peer reviewing them. If anything, he is understating the problem: across all disciplines, the median number of citations of any scholarly work within five years of publication is zero. But I am reluctant to draw the conclusion he draws. My objection is that it is not always possible to know in advance which papers will be dead ends. Perhaps he favors making something like the arXiv more prevalent, but he doesn't explicitly make that argument.
Peer review originally developed because the ever expanding frontiers of knowledge made it impossible for a journal editor to be an expert on everything published in the journal. The alternative, in effect, is that everybody doing science has to become an editor, deciding which papers are worth reading more thoroughly and which are not. There are problems with that solution, too. I'm not sure which is better, but I do suspect that a hybrid system (some journals refereed, others not) is likely to be unstable.