Dummy blog sites to improve Pagerank - Is it ethical?

Just come across a recent web startup using quite a few “dummy” sites (that only have a blog) to create inbound links for their main site. Am sure it would have improved their pagerank - but wondering how “ethical” is this SEO practice? While one may call it as a part of marketing - is it not equivalent to “cheating” the system where you are projecting your website as more popular than it actually is?

May be I am thinking too much.

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