Are links less important than they were?
Back in the early days Google treated all links as being equal. A link in the footer was as good as a link in the main content, a link in bad content was as good as a link in good content, and so on. However, then the new generation of SEOs arrived and started 'optimizing' for links. The black hats created all sorts of problems, but the white hats were also manipulating the link graph. What this meant was now Google had to begin scrutinizing links to decide how trust-worthy they were.
Every link would be examined for various accompanying signals, and it would be weighted according to these signals. It was no longer a case of all links being equal. Reciprocal links began to have a diminished effect, links in footers were also not as powerful, and so it went for a variety of other signals. Over the last decade Google have begun using a wide range of new signals for determining the answer to the question they have to answer for every single link: How much do we trust this link?
They've also introduced an increasing number of signals for evaluating pages beyond the link based signals that made them. If we look at the ranking factors survey results from SEOmoz for 2011 we see that link based factors make up just over 40% of the algorithm. However, in the 2009 survey they were closed to 55% of the algorithm.
So in the last 2 years 15% of the algorithm that was links has been replaced by other signals in relative importance. The results are from a survey, but a survey with people who live and breathe this stuff, and it seems to match up well with what the community as a whole believes, and what we observe with the increasing importance of social signals and the like.
This reduction in the relative power of links seems to imply that Google aren't able to trust links as much as they once did. Whilst clear they are still the backbone of the algorithm, it is clear Google has been constantly searching for other factors to offset the 'over-optimization' that links have suffered from.
I believe link building will remain important for a long time. Google is making changes for the better, they want to make sure they can trust all links and they must make sure they provide good results to their users. Google has a business it has to run and they are doing everything in their power to make sure it's ran effectively. If you want to build a business online, it is your responsibility to make sure you build your online business to meet the needs of your prospects and to meet the expectations of Google. They created Google + so that people can claim their work and if you have nothing to hide, you should own it. This is one way to build trust and authority and Google will have a way of knowing if links are legit or not.