Unfortunately Google created a easy way for competitors or people with bad intention, destroy other people business. If website "Y" is being outrank by website "Z". Website Y instead of improve their link profile, have the option to buy bad links for the competitor. Also if you offend someone and this person has nothing to do with your industry the person can still drop your ranks paying less than $100 dollars.
Matt Cuts said that a simple disavow would work: http://www.youtube.com/watch?v=znOqJu3le2g
But from what you and many others are saying is not working.
When the upgrade was released Google knew those problems would happens yet, they didn't do anything to avoid the issue. In my humble opinion Google just want sale more PPC.
I think the only way to build a solid web business is having your traffic coming from many sources or you create a single point of failure. This is complex task if you think how big is Google Market share, but as web Marketers we have to figure out a way to do so.