What it does in practice is encourage keyword-stuffing.

I've been going through dozens of iOS and webdev resumes a week and about two in three have the right keywords. Their skills don't correlate strongly with those keywords. What has gotten dramatically better results for me has been this: put programmers through some automated programming tests (kind of like an in house version of interviewstreet.com), and filter any graphic artists / designer entirely based off of their portfolios.

That has quickly weeded out those who can't code (or design).