@Automotive ... I do not pretend to be an expert on 'smart pricing', although I did watch all google's videos on the subject and everything that has been officially written about it. Bare with me this is connected to your question ...
Not all sites are 'international' by intent or design, for example I believe @netmeg's main site is so locally focussed she would have fewer long tail hits by foreign visitors on it, and therefore her Adsense ads will have a naturally tight focus and a localised audience (from a developed country); therefore there is no need for her to manually 'prune' which countries get to see ads (forgive me if I am making assumptions).
However your site might be like mine, I get hundreds of visitors from non-targeted, non-english-speaking visitors, from long-tail searches and global social media; in fact the site was averaging around about 179 different countries per day - so in a month this ads up to literally thousands of (non-targeted) visitors. These visitors were coming for the 'content' and ignoring the ads. Now this would not be an issue if there was a proper relationship between, publisher, visitor and advertiser, after all I am not blocking people from my content, only the adverts ...
In a symbiotic (publishing) relationship both the content and the ads on the page should be of high quality and interest to the viewer. I do not believe for one second (at the moment) there are enough ad inventories or good enough ads with incentives for people outside of the main 11 english-speaking countries to click on ads, especially on an english language targeted website being read by visitors who use english as a second language.
The data google released (starting on 22nd March) showed what I long suspected, there were only around 21 countries from those 179 that had visitors clicking on the ads, (there were literally 150 countries with a continuous zero CTR for over 4 weeks, over thousands of impressions) and within those 21 there were only 9 countries that you could say were actually 'worth' taking a chance on that an ad might be clicked on and return a decent CPC.
But don't forget Your Mileage May Vary (YMMV) so do your own testing and calculations.
By white listing only 11 countries (with a bottom 2 monthly rotation in and out policy) the number of adsense impressions have decreased, but the CTR has increased 'healthily'. Now this is exactly what you would expect, but also, crucially and theoretically, the amount earned should remain the same. After all I have not increased 'clickers', just decreased the 'non-clickers'. Yet the amount earned has increased from those white listed countries with my new 'healthy' CTR.
If the number of clicks has not increased significantly, and neither has traffic, since whitelisting adsense ads (although they have increased in line with previous monthly trends). Then we need to understand why the other metrics have increased proportionately, indicating more money is being earned on each individual 'click' and 'per thousand page views'.
I would say there are 'stages' to smart pricing, it is not either 'on' or 'off'. For me, narrowing my focus and improving my CTR (at the expense of overall page impressions) has probably put me in line with someone like @netmeg who already has a naturally 'tight' focus and 'low' smart pricing penalty ... (?Guess Work?).
So I am happy to block low performing countries countries (see the second to last paragraph also).
____________________________________________
FWIW ... I think there is NO WAY google 'for the foreseeable future' is going to allow the 'average' adsense webmasters the control of blocking countries in the normal adsense control area. I am actually surprised they released the data for us to see and compare, because this data was the first thing I utilised to block ads through DFP. The reason why google will not allow the majority of their webmasters who 'copy and paste' the code onto their sites is economics, and 'the chicken and egg' scenario.
Without having the dominant global position as the advertising network with the largest number of page impressions (websites showing adsense advertisements) Google cannot convince advertisers in both the developed and developing world to increase ad spend and advertise in 'poorer' countries - so, as I say, which came first? 'the chicken or the egg?' i.e. page impressions or advertisers? In this case the answer has to be 'page impressions'.
Without the 'numbers' local Advertisers in the future (who want to get involved with online advertising as the market matures) would use a 'local' ad network instead of google - those local/national companies who do have the page impressions and 'eyeballs' of the populace.
If google can gain dominance in global page impressions showing adsense ads on quality websites (written in all languages) it forces nearly every advertiser to choose Adwords to advertise on.
However, if by allowing 'blocking' and 2,000,000 of their adsense advertisers suddenly pulled the plug on allowing ads to be shown on poorer performing countries, google will not have the driving seat on future advertising revenues in these countries - and future income and dominance in developing nations as the advertiser network of choice will be lost - this also explains their very lax policy of allowing just about anyone (world-wide) to become an adsense member, just in case they become a 'popular' web destination.
Google's strategy is simple, get dominance first, then clean up the mess in about 5 years time .... allow everyone, and then ban the worst in an ongoing SPAM struggle ... I think only when they are home and dry in global dominance will Google then firm up adsense membership criteria, and allow people to 'block' countries as a matter of course within the adsense interface ... although there might not be a need to block countries any more IF the online advertising markets in developing countries pick up.
The online advertising market is pretty well mature in the USA and the UK, and getting stronger. So at the moment I am content to sit and wait until these countries develop economically in terms of online advertising and the ad inventory is there. For example Poland, Spain, Turkey etc. are all huge countries with the potential to do well in Adsense/Adwords, but at the moment they are not. So I am happy to add them back into the list when they start to 'mature'.
The reason why I am happy to wait is that without ads (which were never clicked on) my page load times and overall site speed is faster (by at least 2 seconds, probably more) to visitors from less developed countries, this improves bounce rate and other metrics, which could also be beneficial (in many ways) as these countries catch up with broadband infrastructures ...
This would also work for me if I was an Indian website owner targeting my website at the maturing Indian online market, I would want to block adverts being shown to other countries who do not 'fit' my audience targeting profile and who do not 'click' (for whatever reason).
But Please Remember - This Is Total Guesswork In A Black Box Situation ... YMMV
