How is that a fatal flaw (or a flaw at all). By clicking on all of your friends, you are signalling that you want to have sex with any/all of your friends. At this point, if any of your friends signal a want to have sex with you, the service will see that two people want to have sex with each other and tell them.
If you clicked through all of your friends to see which ones clicked on you (even if you do not want to have sex with them), then you simply lied. People who lie this way will inconvience those who the service paired them with once, after which point none of his friends would click on him again because they do not trust his genuine use of the system. This leaves you with the people using the service as intended.
CrushMail (or something like it) circulated among my friends at some point during the late 90s. Perhaps she was fibbing, but the one girl who I think I matched with (??) said she had just clicked on everyone.
So, plausible deniability wins.
On a completely different note: this is basically a non-issue after one's mid-20s, by which point most people seem to have the ability to appropriately inquire after those whom they have an interest in, and have a reasonably good sense for who is eligible and who isn't.
If you clicked through all of your friends to see which ones clicked on you (even if you do not want to have sex with them), then you simply lied. People who lie this way will inconvience those who the service paired them with once, after which point none of his friends would click on him again because they do not trust his genuine use of the system. This leaves you with the people using the service as intended.