I don't have the experience to paint one way or the other with such a broad brush but I find it difficult to believe.
98% is a very high number.
I do have some experience in margins however. If high margins indicate a problem then there are a great many companies in trouble.
Regardless, I cannot make the link between high margins and unethical behavior when the consumer has the freedom to make their own decision. Especially when many of the products offer Money-back guarantee's long after the sale. Couple that with the fact that they have high repeat customers and I find it hard to believe.
I did IT work for an MLM years ago but have never sold any product or signed up to do so. I found the company as ethical as anywhere else I ever worked... probably even more so. I have since run into people using their products who swear by them.
Do you have any evidence to back up 98%? Which products formed the 2%?