I do agree there are a lot of stocks that rely on the greater fool and investing in them often times ends badly, but I think that's a bit of a simplistic view. Although it can be nice as a shareholder to get paid a dividend (there can also be tax drawbacks), a company should really only use it's profits to pay one as a last resort after considering whether the money could be more wisely spent re-investing back into the business, making acquisitions or buying back their own stock if they consider it undervalued. The growing tangible value of a company is just as relevant to a stocks price as whether or not a dividend is paid as are a company earnings.
True enough that a company should make careful consideration of what to do with its profits and direct them most appropriately for the situation. However, government taxes and regulations mean that for most, this means reinvestment instead of dividends even when dividends would be a better option. This suits the government, of course, as its currently printing huge amounts of money and needs somewhere for it to go. Investments which don't have to prove their worth are ideal for that.
The issue with lack of dividends is that they are an extremely important market signal. The problem where dividends are not paid is that you have a kind-of singularity, a box where you can look in and see (some of) what's going inside but nothing goes in and nothing comes out. All companies will have a lifetime (granted for some, it will be extremely long), creation, existence and termination. If no dividends are ever paid, what value is provided to the investor over that time? Also, if dividends are not paid, it is possible to pay financial games and mislead investors over the value of the company (think Enron or Worldcom). In any case, who is to say that the companies are making smart use of their reinvestments? Maybe they will choose the wrong fields to enter, maybe they are a company that has a limited lifespan due to changing conditions (AOL anyone?). Reinvestment often means a company will grow and bubble beyond the size it should actually be and is partly responsible for some of the huge out-of-control corporations we have at the moment. Dividends allows an investor to use his own wisdom to determine where to place the profits from his investments.
Again, dividends are not the be-all and end-all of investment but I do feel that we have moved too far from them at the moment and a return to a sane market will see an increase in the number of companies paying decent dividends.