It seems like a short term play to not fix this. It's been made somewhat better after the move to default CPM a couple of months ago. With CPC you can low-ball the bids and get lots of cheap impressions (despite the click-fraud). But after a month or so, they completely shut down my ad where I did this. I got lots of clicks on the ad, but no conversions. :( Looks like the OP experience the same.
http://news.ycombinator.com/item?id=4312731
http://news.ycombinator.com/item?id=4648982
It seems like a short term play to not fix this. It's been made somewhat better after the move to default CPM a couple of months ago. With CPC you can low-ball the bids and get lots of cheap impressions (despite the click-fraud). But after a month or so, they completely shut down my ad where I did this. I got lots of clicks on the ad, but no conversions. :( Looks like the OP experience the same.