Why would anyone use Google text banners over image ones? Does anyone really ever click on "Ads by Google" text banners? If so, when are they appropriate?
If you have a text ad that attracts attention on a relevant page, yes, people do click them. Some sites also display only text ads os that is your only option in some cases.
On several of my sites I don't use anything other than text ads. These can be very effective when the layout of the page and the look of the ad makes it fit with the content. That gives visitors value versus slapping up an ad unit that nobody really even sees any more.
I guess you may be right. They just always seem to stick out as obvious ads to me. Maybe my eye is trained to see them that way.