Part of it may also have to do with panicking webmasters. Many of my competitors depend on AdWords because their websites have always performed poorly (because of badly done DIY seo, Flash, and dynamic urls).
They were not reacting to losing positions on the serps, as they never had any, but that didn't stop them from running over a cliff like demon-possessed hogs. In some cases they hiked their max bids from one dollar all the way up to six dollars.
I'm seeing an easing on their spending lately and hopefully that trend will continue.
Interestingly, I didn't see the panicking in another campaign I run that's in an entirely different sector.