I think This question is better answered by Agent000. He is one of the well wisher of Google and have vast knowledge of Google.
They update it to improve results and kick out spammers but end up kicking out many legitimate sites as well
Quoting from Google's blog: “Our goal is simple: to give people the most relevant answers to their queries as quickly as possible.” And, some web sites are also updating ways on how to deceive rankings, that's why Google updates algorithms.
The playing field changes all the time. Big players can become competitive. To stay afloat, they need to up their game and stay on top.
This is all money game more they punish SEOs, Revenue go high, Because suffering website opt for PPC campaigns...
Google updates their algorithm on regular basis because the web is filled with spammers and whatever google does, they always have some tricks to manipulate the google ranking. So it's a win win for quality sites who are following guidelines and not trying to break the google guidelines and vice versa.
Lucy Barret nice advice here, but it is good for you if you please research on Google for the keyword "Antitrust google" . Might be it help you to understand the scene.
Hi Ravinder, I am am not declining the fact that it is also a source for google to attract web owners to use PPC. But more often, only those sites get penalized which are spamming from some way or the other.