I very much agree with your point about being at the end of the result set not being "all bad". In fact, my observation that for targeted keywords on my sites it is impossible for any of those pages to rank better than 40ish before getting sent to the back of the room - no matter how specific the query - is a sign of hope. My highest ranking pages are at the end of the results. If the re-ranking overlay can be improved, there is light at the end of the tunnel.
I've watched keywords climb from the 60's to the 50's and right when they get on the verge of breaking into the top 40... they drop to the end. Which tells me that without the re-ranking they would be somewhere near the top.