In reply to your original post, haribobo, it sounds to me that the problem isn't the 'parenting strategy' that your friends employs, but rather that she is depressed and unhappy with her life, so she has no capacity left to take care of her child beyond basic physical needs.
Is there a way you can encourage her to seek some help for herself? Maybe offer babysitting if she sees a counselor or something?
Once she is in a better state she will be better capable to set some limits for her child (which is sounds like she should).
rest of thread:
children are very capable - I remember being 8 or so and helping my mom iron, and clean the bathroom mirrors. I loved cleaning mirrors when I was little. Why do I not still?