Somehow I can't feel bothered by this. If anything it will raise awareness that everything on the internet should be taken with a grain of salt. And who is writing a "self-less" blog anyway? My guess is: nobody. So let's just discard the myth of the holy blogger.
Another thought: whose review of a product is likely to be more neutral, the one from a blogger who bought it with his own money, or the one from the blogger who got the product in the mail for free? My guess is the one who got it for free might actually be more "objective", because otherwise there is that psychological effect that people estimate things higher that they paid for, so that they don't feel stupid. See also http://en.wikipedia.org/wiki/Cognitive_dissonance (Cognitive Dissonance)
"Another thought: whose review of a product is likely to be more neutral, the one from a blogger who bought it with his own money, or the one from the blogger who got the product in the mail for free?"
We should try this with politicians and juries -- instead of letting them come up with policy on their own, we should bribe them so they'll look at it more objectively.
This is really a bad idea - it corrupts what is so attractive about blogs - that they represent the genuine opinions of the bloggers. If there is a disclaimer in the blog about the sponsorship, however, no problem.
Maybe it's time to stop treating 'blogs' as a monolith, since they're as definite a medium as, say, "Ink-like substances on tree-like materials." Some blogs will become less reliable if they can get paid to advertise -- just as some blogs got less reliable when people realized they could distort facts to support their political favorites.
If you want a blogger you can trust, you're already screwed. Blogging makes you exactly as anonymous as you want to be, so it's almost certain that what people refuse to disclose is whatever will hurt them most.
Another thought: whose review of a product is likely to be more neutral, the one from a blogger who bought it with his own money, or the one from the blogger who got the product in the mail for free? My guess is the one who got it for free might actually be more "objective", because otherwise there is that psychological effect that people estimate things higher that they paid for, so that they don't feel stupid. See also http://en.wikipedia.org/wiki/Cognitive_dissonance (Cognitive Dissonance)