Is it ethical for authors to reference another paper, but not cite it formally, because they consider it unscientific? I found in a medical paper from the 1990's a non-citation like this:


  The results and terminology by John Smith, Jane Poe, John Doe, Richard Roe, Larry Loe, Journal of Scientific Papers, 12345-698 (3), are unscientific [Brown, 1997; Lawrence 1985]


So, they want to unequivocally  reference the paper by Smith et al; but as they consider it bad, they don't want to give them a citation. I have never seen that before. Also, I am not familiar with the field, so I can't say how bad that paper is.

Citations are considered as a measurement of the impact of a paper, and as such, a proxy for its quality. On the other hand, people cite papers even to criticise them (you did it all wrong, people!).

Is this non-citation ethical? How bad would the paper have to be to justify it?
As editor I would not accept this in a publication. If it is published it should be referenced. Yes, it bumps the references for the authors and yes, bad science may attract a fair amount of citations for all the right?/wrong? reasons. But, it is not up to the authors to decide how referencing should be made, journals have guidelines that should be followed. Having the citation properly referenced makes it easier for others to find the article and see it for themselves. 

Furthermore, from another point of view the statement that something is "unscientific" is not appropriate either. It is an opinion. The cited paper can be unscientific but the academic way to show this is not to just say it but to prove it.

Your quote is a specific case, of which I know nothing, so the reply concerns the general case but I would react if I saw something like that in a paper I edit and I would ask the authors to stick to facts.

One last point is that if a paper is really bad, then it should be considered for retraction. That is how scientifically extremely poor, bordering on dangerous, papers are handled.