This same system is also used in St Louis and SLC and nearly ever city that has a Light Rail system similar to ours.
If you think about it, how else would it be done? Its not a subway, so you can't really have turn styles (and NYC still has turn style jumping) because people could just walk around them. It would be a huge labor cost to have someone checking everyone getting on. You do have to validate/activate your ticket before you get on (the machine does it for you). There's just really no sensible way to make sure 100% of the people are paying.
Either way, its irrelevant, NYCs system is far and away the most used in the country and it doesn't cover its cost with its fares, Phoenix's isn't going to either. Rail transit still moves more people, for less cost, using less resources, emitting less greenhouses gases, requiring less eminent domain than highways, and thats the important thing.