For some of us, being able to research as a paid job is one of the best that could happen, for some others its just another job. No matter what advise you will get from here, your decision will depends on the way you look at it. From the spirit of your question, I think that you will fall into the later with an extra intention that you would be able to contribute to academia.
Is this extremely dishonest to start a PhD without the intention to finish it? Will this put me on some blacklist at that university?
That will depend on the nature of project and the type of contract you would be signing. For me, the contract is for 3 years and the project was designed such that there would be experiments and analysis during these years. As you would expect, the first few months would be learning the necessary tools and methods. If I chose to quit, that will put the whole project in jeopardy and if the group decides to take another candidate for the same project, unless they couldn't find someone who already know the tools to work, it is a huge waste of productive time.
How should I portray my position in my other PhD applications? I was thinking of saying that I was doing a funded student placement program or something?
Well, I suggest you tell the truth. Everything else would be trying to suppress what you had been doing. You really don't like the whole idea, do you?
You will never know if the person who would have been accepted instead could contribute more than you will in your proposed year, is passionate, or just another candidate looking for just another job. I am sure that you got the position because you are eligible for it, and you are in full liberty to choose what you do with it, but as I mentioned the first part, an ethical dilemma occurs when your intentions could jeopardize the whole project.