I'm just jumping into this conversation (again) but I've "felt" that as little as a year ago I could pay for Adwords for a info site one week and see an organic increase the next; I was literally running ads only every other week and to good effect (I say). When we stopped ads for a month we slipped back to pre-advertising traffic levels (did that about 3/4 times). It's been a year without any ads but we're doubling last years numbers with that site so there have been no plans made to continue that "experiment", just to keep working.
Nothing about that whole experience got us beyond a certain traffic level; it wasn't a continuous growth, just a temporary inflation. Also, I can't honestly say it wouldn't have gone further than that by spending more but think that there's a fine line that makes AdWords ads viable backlinks to some degree.