incrediBILL - 7:58 pm on Oct 29, 2011 (gmt 0)
I don't buy the advertiser explanation.
For some reason people get the impression that AdSense is just a big bucket of endless money which isn't the case. I do some limited advertising, so buy it or not, I know when my budget expires so does your earnings from my wallet.
Traffic up, earnings down
You also have to take into consideration the traffic source, SE keywords, geographic location and time of day. Just because you have more traffic doesn't mean it's good traffic and the algo will discount what it perceives to be less valuable traffic.
There is also the theory of supply and demand, if all the AdSense sites in your niche create a larger traffic supply, it will also cause the value of your clicks to diminish.
More traffic does not mean you have more advertisers or more advertising budgets.