This assumes the state of the contextual advertising market will remain static forever. It won't. Google's overwhelming dominance will wane in time as the market matures, and when that happens publishers will be the driving force in the industry. Advertisers have little choice but to run their ads, and the pool of active advertisers will always vastly outnumber the pool of publishers. Using sleight-of-hand techniques to pacify advertisers and shareholders might work in the short run, but it will come back to bite them in the ... - and probably sooner rather than later.
You're right - because they know there is no accurate way to measure conversions. It's the guessing game they play that makes the algorithm perform so poorly.