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.
Huge error bars on a near zero estimate don't mean a whole lot except that the experiment producing the data is flawed.
I don't think alexa "scales up." If they do, then, you're right, there is uncertainty. If they don't, I don't think there's a concept of an error bar here. They track how many people go to what sites. Aside from a few dropped packets here or there, there is no uncertainty in that measurement. Therefor, there is no way to measure that sort of error bar. (Right?)
Isn't the whole problem with alexa, in this case, that the cross-section alexa trackees, is not necessarily the cross-section of people who would be interested in octopart?