Why do websites need to do that? It's all written in the title. Thanks in advance for any information on this.
I think it's perfectly legal. Why not? I don't know that governments have or need to take a stance on the issue. Any issues arising from artificial traffic generation sound more to me like an industry concern (if at all) as opposed to something that needs to be controlled with legislation.
MrChrister makes a good point about the ad networks probably not liking the practice, though. For instance, if you hire or artificially induce people to click on your Google AdSense ads (should you have any), you're violating the terms of your agreement with Google. (In fact, you're not even allowed to click on your own ads if you're in the Google AdSense program.)
On MrChrister's second point, of "getting information on the internet" ... well, you can certainly hire people to create content for your site, but it might not have the same flavor as real user-generated content unless your paid content creators ("writers") are also interested, mindful, and passionate about the subject matter they're involved in creating. A small amount of "artificial" content created that way can be helpful to bootstrap a site, but it doesn't substitute for a real community – that ought to develop naturally, organically, with real people.
I work very directly in the center of the online advertising world. This happens all the time. All of our clients make all of their money, indirectly, by generating traffic to their website, so we've seen lots of different attempts.
It all depends on the method used to generate the traffic -- Paying for clicks or views (from Google Adwords, MSN AdCenter, Y! Ads, Facebook PPC or CPM, MySpace Ads, etc, etc) is perfectly acceptable. Spamming, whether it's on email, facebook, myspace or SMS can get you sued. Buying blog comment spam can make Google freeze your search rankings or deindex your site. Paying another site to link to yours (or trading links) is fair game.
I think it is legal to do this, but I would prefer generating traffic by putting up quality content to the site, hiring people to generate content is the way to go in my opinion as opposed to pay someone to click to your site or generating blog spam.
I can't imagine why it would be illegal. I would guess the only reason to do such a thing is to artificially increase your page views or advertisement impressions, which I am quite sure will violate the terms of service for whatever ad network you belong to.
If you mean to have people visit your site just the padding in the traffic stats, I see no harm. If you mean to have people visit your site and participate in some social media (like a forum or stack exchange) I guess you are still getting information on the internet, so I would call that the point of the thing.