I think you may be attacking a straw man here. When I was taught about the PD almost 20 years ago in an undergraduate class, our professor made exactly the same point. If there are enough iterations (even if you know exactly when the game will end), it can be worth the risk to attempt to establish cooperation via Tit-for-Tat. IIRC, it depends on an infinite recursion of your priors on the other guy's priors on your priors, etc. that the other guy will attempt to establish cooperation. You compare this to the expected losses from a defection in the first round. For a large number of rounds, even a small (infinitely recursed) chance that the other guy will cooperate pays off. Of course, you then have to estimate when you think the other guy will start to defect as the end approaches. But once you had established cooperation, I seem to recall that this point was stable given the ratio of the C and D payoffs.