Dropped domains & private blog networks are finished as far as a viable seo tactic goes.
I think I could write for the next hour just on my thoughts about this statement..
What I'm going to talk about is on the topic of sustainable rankings
Currently google treats dropped domains like they never dropped, so if you get a number of quality domains under your control you could rank a site, because as ever, links rank sites.
I also believe if done right you wouldn't have a problem with algorithms
^ That is depending on the competition for the keyword, because the harder it is the rank, the more you will have to scale up, the more obvious it might become.
Now once you got to ranking if you were reported by a competitor could you stand up to a manual review, nah, so therefore you couldn't truly call this a sustainable ranking method.
I suppose it's a (maybe not particularly realistic) possibility that you could get the site ranking with the dropped domains, then the traffic they bring would also produce natural links and buzz, so before any manual review you could remove your manipulative links and rank off the natural ones..
I guess I'm thinking about it like a space ship with rocket boosters that jettison once they reach orbit
(I'm really waffling now)
Personally I haven't tried to use a dropped domain to rank another site, I've used them as stand alone sites & they regain their former SERP rankings.
Dropped domains & private networks are also not going to make you look like a brand, which Google seems determined to push towards as a major ranking factor.
I think you're thinking more towards product searches.
Informational sites will fair a lot better.
Of course an informational site with some affiliate aspect to it/and or advertising probably wont make as much money as if it was just pure product pushing site, but long term it's a much safer option..
Also you will start producing the right signals if your content is good, attracting new links, social shares etc