When the network is bursting at the seams with publishers eager to fill unsold inventory, it causes cpc rates to go down.
There will be more impressions but that doesn't make the clicks worth less money. Also, this logic assumes that the number of pages surfed will remain constant. If there are more competing sites than before that doesn't mean my site is visited less often. This is not like a retail store where a person has to choose one or the other. On the internet, they can choose both.