I know some areas are lower for CTR but 0.5% isn't making google much money at 10c. (that's equivalent to 50c per thousand impressions, not good)
I would be pulling (what's left of) my hair out if I had such a low CTR, 4%+ is the target I aim for. When I start a new campaign Google sees that I have a good history of CTR and it gives me keywords at a price that it thinks is suitable.
As an example, a campaign that I set up on the day of the change (30,000 keywords) I have 22,000 at 5c and 8,700 at 10c, just 300 are asking for more. The CTR is low at 1.8% but growing as the ads climb the positions (currently average 6.0).
If you make google money they will reward you with a better deal. That's what I like about their algo.
The system has some obvious flaws, and google will see that many words go unadvertised.