With another season of American Idol starting up soon, I'm guessing there will be the usual "controversy" of how the producers manipulate the unwary into public humiliation for public entertainment. Here's my take on the "reality" of reality TV
I think the key to understanding the producers is that they manipulate the situation, but they do not tell auditionees what to do. If they wanted me to be silly, they could have just said "Be silly!" and I would be silly. But they have this "producer's code" that says, "You can not make an auditionee do something." Instead, they ask "Would you like to be silly?" (maniuplate the situation) and see what I'd do.
Similarly, if they want someone to act bitchy, they don't tell her to act bitchy and/or edit the footage to make her seem more bitchy. Instead, they deprive her of sleep, put her under lots of stress, and let her natural bitchiness come out.
On the other hand, camera men are under no such code. Their code says they can directly direct an auditionee to do something that enhances visually what that auditionee is like naturally. For example, Carrie Underwood is afraid of flying. When she got of the plane, she kissed the ground. I wasn't there, but I'm pretty sure the cameraman told her to kiss the ground when she got off, to visually illustrate/communicate what she was genuinely feeling.
I'll also say that while the top producers do respect the auditionees, the half the lower level producers, not so much. I dunno, maybe after seeing so much aspiring talent they disdain the idiots who keep trying. I do get the feeling that some of the lower producers see the talent as sub human cattle, and they really enjoy "setting up" the delusional for a fall. (But I guess that's why they're lower producers instead of being good enough to get ahead.)
As for showing the best and worst, and denying exposure to the "almost best." That's the nature of the business. Really. I've auditioned people for my bands and movies and such, and the people I remember are the best and worst. Yes, there is some truly delusional "talent" out there. It's the producers job to produce the most entertaining TV, which means to present the most memorable 6-8 auditions of the city.
As for the long term effects of national humiliation,, I suspect it's the same as the long term effects of national "almost stardom." Who came in 4th in Season 5? I don't know. I wouldn't recognize them in the streets if I saw them. Similarly, not as much long term effect for the delusional that we only here from once. (Unless they've got a plan, or bump into competent producers to further their career, like William Hung.)
The one thing I do wish that producers would do is that after the delusional auditionee falls for the set up, that the producers would put more effort into decompressing them, instead of just letting them walk away angry. Sure, they might not listen to counsel (when the cameras are off) that "You're not good enough now, but if you had some voice lessons blah blah blah." It might not make a difference for some, but it would be a nice gesture, and do much to alleviate the negative ill will that gets generated.