I've heard a similar story before - at least the using loans to buy assets, and using those to get more loans bit. I can't remember who, but I think it was someone who is pretty famous (and wealthy) now.

I don't disagree with your reasoning, but I think your result is completely off the bat. The thing is sometimes you have to take big risks to get big rewards, and if you play it with enough of an edge you can win. Whether or not you think it is unethical or not right, in reality I think this is how a lot of businesses are actually run.