Where Yelp has allegedly crossed a line is in manipulating the user-generated reviews of a site according to whether they pay for advertising, while claiming that no manual intervention is happening.
The truth is likely more murky than either party's depiction, of course; I wouldn't be at all surprised to hear that their "automated filter" does take the "ad partner" status of a business into account when deciding how many reviews to flag for moderation or removal.
Of course, you're right to suggest that at a certain level, Yelp can do whatever they want. They just shouldn't misrepresent what you're buying with your ad dollars.
Let me illustrate in what scenario they would be the same. Say I'm #1 for a Google Search. A Google sales rep then contacts me and says that for $300 a month, I can maintain that position. But I have great SEO and don't need to pay Google anything. After I decline to pay, Google's ranking algorithm destroys my pagerank and I am now on page 5 of search results.
That doesn't seem right.