I discovered a hacked site recently which has a div in it with a bunch of links to casinos at the top and the div is display:none;.
I understand that black hats may hack sites in order to gain backlinks, but what is the purpose if the links are display:none ?
I thought Google disregards these links?
Are these hackers smart enough to hack sites but too stupid to read up on SEO basics?
So what is there to gain by injecting hidden links?
Google does not just ignore links in sections that are display:none.
Consider DHTML multi-level drop down menus. In such a menu, you hover over the top level menu item and a list of links drops down. That is a case in which the links are in display:none initially, but user interaction with the page shows them. Using drop down menus like this is common practice and absolutely fine with Google.
It is impossible to write an algorithm that can tell if a div that is display:none could ever by shown by user interaction and javascript. (See the halting problem.) The best that Google can do is a heuristic.
Hackers that insert hidden links into sites are doing "churn and burn" SEO. Their rankings may increase for a while until Google discovers their spam. Then Google penalizes their site. The hackers throw that site away and start a new site.
I think black hats SEO just wanted to hack this website without being detected by the webmaster.
Indeed, putting hidden links in a webpage is out of the guidelines edited by Google. However, it doesn't mean that doesn't work for SEO. In general, it doesn't work a long time.