Yes but surely alexa knows how many alexa trackees it has. It knows how much it's scaling that up to make an estimate of the real population.

For example, a very big site, you have enough trackees to make a reasonably statistically valid sample. But smaller sites, you don't see as many trackees, so you set the error bars higher.

Sure, I agree that the system is flawed anyway, seeing as how I don't know a single person who installs the alexa toolbar, and amongst techie sites it's usage is probably 0.