True, but looking at the posted host file I would guess that it was put in to block adware sites, since redirecting a site to 127.0.0.1 is usually a good way to prevent it from showing up at all. Some people recommend 0.0.0.0 instead; I don't know the pros and cons of one versus the other but I would expect 0.0.0.0 would send out IP requests for information (which would die at the next router) while 127.0.0.1 wouldn't leave the local system.
I was thinking the same thing. SpybotS&D, for instance, can make a protected hosts file (though it's not a default. You have to manually do it, and can delete it if there's a problem).
Here's a partial example:
# Start of entries inserted by Spybot - Search & Destroy
127.0.0.1 coolwwwsearch.com
127.0.0.1 coolwebsearch.com
127.0.0.1 hi.studioaperto.net
127.0.0.1 www.webbrowser.tv
127.0.0.1 www.wazzupnet.com
127.0.0.1 gueb.com
127.0.0.1 kabex.com
127.0.0.1 www.hityou.com
127.0.0.1 miosearch.com
127.0.0.1 wazzupnet.com
127.0.0.1 213.131.225.2....
# This list is Copyright 2000-2004 Patrick M. Kolla / Safer Networking Limited
# End of entries inserted by Spybot - Search & Destroy