I still don't understand why people don't cheat in FPSes by looking at the video stream and having a USB mouse that emits the right mouse movements. (The simplest thing is to just click when someone's head is under your crosshair, in games with hitscan weapons.)
The problem with these bots is that they are indiscriminate which makes them vulnerable to active detection methods. They can also introduce an amount of latency that begins to defeat the purpose for sufficiently skilled players. 100ms is an eternity when you are playing with shotguns in close quarters.
They do. Cheats that read rendered pixels are nothing new.