Well I can literally spend the next few hours giving you examples of how my company (not reputation.com) justifies (very easily btw) charging 5-6 figures for a ORM campaign but I really don't have the time right now. So I will give a couple responses to your initial question.
Do you think that a negative SEO campaign will be effective on a negative New York Times article with 10,000+ backlinks? It won't, now think of what it takes to suppress these types of articles off of the first three pages. Clearly that justifies a $50,000 cost. If you can't see that then you have no clue what goes into an effective ORM campaign. 100 well written articles along can easily cost $2,000 (Content writers reading this, don't PM me your crappy $2 per article services; I'm not interested). How many high PR backlinks do you think it will take to suppress this article? Now times that by 29 as we aren't pushing it one position we are pushing it 29 more positions. Do you think we can use these crappy public or even many private blog networks for backlinks? They get shutdown left and right so we have to have our own and our own networks don't get shut down cause we actually develop them in the correct manner and maintain them correctly (Don't PM me asking to post articles on our network cause we only use them for our own clients).
A negative SEO campaign may be effective to kill off a hate site with no backlinks for some random nobody, however that is not an ideal client and negative SEO might be effective right now but tomorrow it may not be. Thus relaying on negative SEO is not a smart business move.
As for Reputation.com they are a joke, they don't run negative SEO campaigns cause they have VC money and there are a lot of eyes on them. I would love to meet their 'SEO' team cause I have a list of thousands of their clients and guess what? Only a tiny fraction of their clients actually have a clean online reputation. Reputation.com focuses on the software end and that is where they see the future of their company going, their service end of the business is just a way to up the revenue numbers that investors look at.
Anyways, most ORM companies don't deliver and that is sad to say. But the few companies that do deliver know that it costs a lot of money and resources along with a very tightly executed strategy in order to actually clean up an online reputation of a celebrity, government official or fortune 1000 company. Plus our services are in high demand so we are selective in who we take on.
As for defending the practice of ORM, well I could careless if people think that we are hurting free speech. We are not hurting free speech, our governments have already killed that off.
Anyways that is my quick 2 cents.