however, when I go to the cache of a product page then I see nothing of the page back in the cache (I never checked this before - only after seeing your post above). Is that bad, or is that a part of having frames?
It's part of having frames, and it doesn't effect anything.
but large ecommerce or information sites which relies on search engine traffic cannot be build with frames.
Why not? Because the pages won't get indexed or they get lowered in the rankings?
Your whole internal link structure gets destroyed when you have a framed site.
But it doesn't have to if designed properly. There are correct ways to design framed sites and incorrect ones. I can't show you an example because I don't know of them, but I'm sure there are plenty out there. I have definitely run across them in the past.
Frames are an indexing problem, not a ranking one. And if you overcome the indexing problem through proper use of navigation on your inner framed pages, they are absolutely, positively no different than non-framed pages. End of story.
I am saying this based on my programming experience building sites. They dont lower ranking the problem site wont rank for competitive phrases and I will be pleased to see samples of competitive rankings. Now I deal with very high competitive industries and my experience I very very rarely see a framed site doing well in competitive arena.
That's because nobody in the competitive industries would be silly enough to use frames as they're not worth the trouble.
You are mixing up cause and effect though. Just because the people in those industries aren't using frames, doesn't mean they couldn't use frames and do just as well.