Statistically, it isn't a joke. However, it is a very subjective and there are lots of misses. Someone did an evaluation of the rankings, based on player performance, several years ago (it was posted on this site) and it made it clear that rankings do matter. Having said that, I think the biggest downfall of the system is that it often rewards players based on perceived potential. The NBA drafts on perceived potential as well and that is why some high draft picks are busts.
As for Reed Sheppard, he was also underrated by the majority of this board. Go back and look at the posts about how he will be a good player coming off the bench, etc. from before our Summer games.