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If a place has more 5-star ratings than 4-star ratings, it's generally amazing. If it has more 4-star ratings than 5-star ratings, it's generally fine but not something particularly special.
Just thumbs up/down would eliminate what is, to me, the single most useful aspect of Yelp.
It doesn't matter that star ratings are arbitrary -- when you average enough of them out, a clear signal overrides the noise. You can distrust any given user, while still trusting the aggregate.
(Curiously enough, I don't find any equivalent value on Amazon. On Yelp, you're really evaluating an overall experience along a whole set of dimensions, so there's a lot more to discriminate on. On Amazon, it does seem to be more of a binary evaluation -- does the product work reliably or not?)