As someone who uses email marketing yes it is very effective in terms of conversion costs.
Sure the conversion numbers are dramatically lower if it is done like cold calling however some emails will be opened giving your business another person becoming aware of you. For me on one of the projects the cost per customer was $19 while PPC "focused" was $27.
Also, email marketing has a very high open rate for those who have subscribed to your business "intentionally" to get news and updates if it is resourceful they will continue opening them and most likely not opt out while at the same time you can upsell in the email.
So yes, email marketing is very effective.
In regards to the response of facebook, that was not brought up into question here however yes what you have said is true.
Businesses however need to realize that in order to succeed they need to use a wide variety of tools and services. In fact depending on your audience Radio and TV advertising is the cheapest route to acquire new customers.