I sell medical equipment. I make $150 on a particular product that sells for $700. I convert 1 out of 75 or so, because there's alot of competition in my area, and relatively low search volume.
At my original bid of .75/click, I would spend $56 per sell. Google now wants $15.00 per click? The highest bid prior to this was approx $4.50 per click!
I can't spend $1,125 to make a $150 profit on a $700 item.
There is absolutely no logic to this type of change.
During the Hurricane Katrina crises, the US Govt brought charges against gas stations that performed "price gouging" - raising the price $1 to $2 higher than the norm based on fear perception vs. supply/demand.
Therefore, I would put this Google situation into the price gouging category...