Quantitative investing Scam or not?

After all the recent credit crisis, most of us must be aware of quant’s or at least quantitative trading. If not Wikipedia is always there to help:

http://en.wikipedia.org/wiki/Quantitative_analyst

Well in short graphs, figures, models and formulae's help us finding out what the future could possibly hold, with reference to the stock market of course! Arghm, the thought is a bit dubious, but yes it has been in practice since 1992 and has been working wonders for some. Many companies began using them, banks, hedge funds, private equity management firms and most financial institutions. Watch dogs and rating agencies where aware of the practice and accepted the use of them too. However, much lately (2006) major institutions placed huge bets against these models, which predicted that the market in any case wouldn’t fall a certain amount in a day allowing companies to withdraw their money and prevent them from further losses.

Quant’s or Quantitative analysts are professionals who are trained to use such formulae's or sophisticated software’s. Lets fast forward a bit, 2008 post-credit crisis. One of the causes for the crash we have witnessed has said to be this method. Because of its numerous weaknesses they have always been irrelevant (Prof. Talib 2007, The Black Swan) Thier reliance on historic data, sensitivity to data used in calculation, disregard of tail risk, and assumption of a normal distribution are but a few.

So after being aware of all its weakness should we allow these methods to be continued to be used by our banks? Does it really help in doing what it is supposed to do?

And finally is it scam or not?