Tedster, thanks for the welcome!
I understand that the algorithm is much more complicated than my simple example, and I don't expect Google to roll out every detail for our inspection. I just wish they'd be honest about the reason: that they don't want to give their competition any help. That's a perfectly good reason for keeping their details secret, and much more honest than pretending they do it to protect the web from unscrupulous SEOs.
Still, they could share some general pointers. If too high an ad/content ratio is a problem, they could say so. Instead, we have to read interviews where someone mentions offhand that they used focus groups where one of the questions asked was, "Do you think this site has too many ads?" and extrapolate from that to a theory that maybe there's a new ad ratio penalty. (And this despite the fact that AdSense is still sending us emails telling us to add more ad units.)
I'm not looking for hand-holding, just some general indication of what they want -- beyond "make quality sites with useful content" -- since they've set themselves up as the arbiters of what can and can't be done on a worthy web site.
As far as Farmer goes, my impression is that it's simply broken in some respects. Something went wrong, maybe some unexpected conflict between the Farmer update and the recent supposed anti-scraper update, that's messed up the ranking of original content over scraped, especially if the scraping site isn't as ad-heavy as the original. That's probably not what they intended, so I suppose there's hope they'll fix it.