Theory seems eminently sensible to me, but even most SEM ads just point to the home page, so has the theory some fatal flaw that I've missed?
the reasons to not do it are all here:
Webmaster Guidelines
[google.com...]
to me, it's a basic thing really. i try to build adwords campaigns and ad groups to work with the site i have (which is designed to serve it's visitors). i don't primarily try to change my site to work with adwords.
i focus on serving the consumer / site visitor, not any algorithm. my site's information isn't based on adwords, it's on filling visitors needs. i think about how navigation and landing pages can be used in adwords, as i design and build them to work well, but what drives me to build them is the need to serve my visitors - and by serve, I mean selling them by giving them what they need.
navigability is important to me, my landing pages aren't ppc specific, they are parts of my site that i land ppc traffic on - they were built because i wanted to convey information, presenting things, then i find the best way to send ppc traffic to them.
i work hard to optimize conversions, but i do it by asking myself... for a given ppc visitor, what is the best way i can give them what they were looking for...
one sure sign that you're serving the algorithm, and not your customers needs, is when your ppc landing pages can't be reached by direct type-in visitors on your normal navigation. a/b testing is a short term exception to that, but generally, you'll get whacked for duplicate content if you make loads of pages, tweaked with minor changes, where each is serving up what you think adwords wants to see for something in particular... just keep in mind that the engine / crawler / owners of google don't want to see duplicate content, and they've told you so beforehand...
good luck to you, whichever path you chooose.
