Thanks, Cort, for an excellent article.
I may be able to shed some light, albeit cynical, on what went on with Lancet and the study. Being familiar with epidemiological studies and academic situations and research funding, it is not unknown for some researchers to tweak or falsify their findings in order to justify their funding and/or in hopes of getting more funding.
Although I do not read many research studies thoroughly, lacking the stamina, I'm amazed at how many I have read that make claims that are not justified by the study. For example, claims that an herbal remedy is not effective, with no discussion of dosage when they used very small amounts in the study.
Or confusing correlation with causation, when in fact, they may have it backwards, or there is no relationship to causation at all. These appear to be common in published studies that are reported in media. Additionally, remember the "publish or perish" concept which rules in academia and perhaps elsewhere. People are desperate to publish.
Now, as to how Lancet or others failed to see the errors and deceptions of the PACE study, there could be lots of factors: sloppy scholarship, being impressed by the amount of money behind the study, bias, the wrong reviewers (e.g. not statisticians?), and the common error in the US, having those who know nothing about ME/CFS review research grants, and presumably articles also. Or those who do not know how to critique statistical studies.
Getting published in Lancet is the brass ring, and think about all the incentives to get there. Some people will do anything to "succeed", and lots of people lack scientific discipline and morality.
I can't say what happened here, but these are all too common problems in our world today. My impression, based on an admittedly small sample, is that there are many studies published that are invalid and should not have been. And that there is widespread misunderstanding of statistical analysis, among researchers and journal editors and screening panels.
This is most unfortunate because it leads to general mistrust of science and the media's reporting of it, and many "truths" being overturned after many years of firm belief among medical practitioners.
Looking at how difficult it was for h.pylori to be proven as the cause of stomach ulcers, and that multiple sclerosis was once thought to be "all in one's head", we need to be particularly wary of those who would want to prove that diseases are psychological when there are plenty of data indicating otherwise.