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...Wish it would group more generally though or have a setting to adjust how specific it gets.
An interesting idea, jk247g, which I will pass along to the right folks.
In my opinion, I think a laser focus in ad groups is very much to your advantage - and that 3 or 5 really focused keywords are better than dozens of more general ones. But that's just me. Lots of folks here would probably disagree. Bottom line, if advertising in a more general way works for an advertisers, then that's good news.
I do advise tracking ROI though (whether using Google tools, or third party tools) to verify the results.