With their new "relevancy" they absolutely squeeze out small time advertisers and affiliates. Before you could at least dump large amounts of somewhat related keywords and get a return, after their algo update they disable all keywords and the only keywords that are open are the ones that have crazy bids. So now your ad gets 0.0000001 clickthrough rate because it shows at the very bottom (if at all). This brings your "relevancy" further down, efficiently disabling your ads.
they always decativate your keywords if your bid is quite low than other advertisers. No matter if u are already paying $1/ and other advertisers might be paying $3 or $4 for the same keyword. These days its really hard to rank a site well in google on first page. So all advertisers are switching to adwords and then promoting their sites. everyone wanna be on the first page of google and i am also one of those So its very obvious that competition will increase among advertisers. I myself paying around $5/click for few keywords and earlier i used to pay just 50 cents for those same keywords