It feels like the OP came from a corrupt or communist locale where cronyism and nepotism were rampant. I grew up in a communist country like this and always found networking distasteful for that reason. However on the spectrum of hiring signals available it just turns out to be one with a very good SNR due to the trust involved.
Perhaps you think it's a way for people to create and then exploit their connections in order to get a job that they're clearly unqualified for. I will agree that's unethical.
But that's not typically what networking is about, almost no one wants to recommend someone for a job if that person turns out to be an unqualified idiot. Networking is more about finding people/companies you have something in common with and once they know about you it's a lot easier to get hired or referred.
It's not really about some form of nepotism or cronyism.