I would certainly never say don't increase your exercise, but you can, in fact, just starve yourself to weight-loss. It's not healthy, but it'll happen.
I seem to recall reading somewhere that this sort of approach doesn't work long term. As you go on to say:
But if you go from zero to hero in one day then you'll never maintain it.
But if I understand correctly, the working hypothesis is not simply that the lifestyle required is unsustainable, but rather that crash-dieting causes physiological changes in how you process food. The idea is that this is an inbuilt response to famine conditions, and when food is available you will convert more into fat supplies than usual as a buffer against the next famine.
The above is all vaguely remembered stuff, and may well be bullshit.
Something you and RAZD both said that provoked an interesting thought though. I'm familiar with the idea of feeding animals different foods to alter the taste (Gordon Ramsay swears by dark beer in pig feed); but how much do we know about the impact of what we feed our livestock on the nutritional value of their meat?