What is the problem with MLM and network marketing?

Maybe it's the pyramid structure? But you can't really take issue with the tiered compensation structure - every organization "Church, school, government,..." in the world has that.
Lets take the example of a big organization, maybe the company where you work, Salespeople get commission, and sales managers get overrides or bonuses on top of that, and sales directors on top of that, and VPs on top of that. That's the way an organization must work.

Maybe the problem it's the fact that you have to pay to participate in it? But that can't be it, Multi-Level Marketing is a business. You want to start a business without paying?
Try to open a little shop in your city and let me know how much you will pay just to start your business.

Oobviously there are pyramid schemes. yes, they are real . But this is where the money is all being made of signing up other people, without any product being delivered. My friends, the fact is that companies as Karatbars, Forever Living Products, Herbalife, Amway,...  and many others have sold millions or bilions of dollars of products to happy customers all over the world. Is it possible that this companies are ilegal pyramid schemes? So, you must agree that there may be a perception problem here.