well, i have not played for much money online, but i have played a few play money tournies where people sit out (dont know if thats the same thing but thats my experience)
but nothing wrong with sitting out, i mean, sure its annoying, but nothing unfair about it.
like suppose that person was there, and they just folded every hand, thats all they do by sitting out.
the problem is, most people who dont sit out are just as stupid. They will battle it out so hard and force the other people all-in.
i've been on tables where some1 was sitting out, and the rest of us just took turns eating their blinds until he was out. Then we played against each other.
if your that annoyed by people sitting out, dont let them place near top, and they will stop doing it. If there is no harm done by sitting out, people will continue doing it. I've been in 27 people play money tournaments where people who sat out placed in money. Its almost guaranteed placing, so why play and try, when you can just sit out and do almost as well (but like i said above, this is play money =p)