Long time lurker here.
I'm late to the party. I only started doing tradelines a few months ago.
I see several references above to the small amount of time being put into this and I just want to point out that I think the amount of time actually spent on tradelines is probably quite a bit more than you think. No, it's not 40 hours a week, but just look at this thread and the 'main' 2 threads dealing with this topic that total 65 pages.
How much time have you spent in reading those threads to understand tradelines? How many other articles have you read about tradelines? How much time did you spend researching the new and old companies and figuring out what credit cards would work? How about this thread and others looking at tax strategies? How much time have you spent telling a friend or coworker that they should do this (and you would get 'referral' pay)? How much time have you spent researching what credit cards to apply for so they can be used for this in the future? How many times have you called credit card companies asking for a CL increase (or did it online)? Or called reconsideration lines but first spent the time to look at your credit report and educated yourself with the exact reasons that you need this new, specific card?
I point this out not to minimize the hourly wage or rip on tradelines but to simply state that there is more time involved in this than the 20 minutes a month in adding AU's - and that it might change your taxes. Additionally, people like Boarder42 obviously have even more time invested than others who are doing this from a more passive angle. There also is a lot more time put in for the 'start up' than 'down the road'.
I should also say that I'm not an accountant or lawyer.
I agree with your central thesis, but in my case the time allocated to much of what you've described is minimal, and time spent on one other thing related to tradelines is something I think you didn't mention.
Probably several hours reading the two main threads and this one, including the time to respond to others who have questions that I could answer.
Zero other articles read about tradelines.
Zero time spent researching the companies. About 15 minutes spent figuring out which cards would work.
Zero time telling friends.
Zero time researching cards for future use. I just apply for cards with good bonuses and if they can be used for this also, then great; otherwise I cancel them.
Zero time asking for CL increases or calling recon lines.
Stuff you didn't list:
Time spent getting set up with the companies. Submitting canceled checks, submitting W-4's, reading their FAQ's, getting a login, etc. Easily several hours with both companies.
Ongoing maintenance. Noting when cards pass a milestone and submitting requests for adjusted commissions.
Strategy. Figuring out in the beginning how this activity would interrelate with my other credit card activities. Figuring out which cards should go with which companies. Deciding if and how to do private sales.
Taxes. Understanding the relevant tax laws and dealing with the 1099s every year.
A lot of the time sink is in the beginning as I went through a learning curve. Now that I've been doing this for a while, I am really in maintenance mode and it does just take 30 minutes or so per AU to do the add, make a charge, wait, remove the AU, and shred the card.