First, you are not necessarily having the same experience as this guy's advertisers (who are catering to outdoors hobbyists rather than software consumers).
Second, this guy is being 'creative' by creating actual content which people want to watch. It's not like he's started with the idea of generating traffic spikes and then determined that the path to success is mini-documentaries about big trucks or coastal sailing. This guy is working just as hard as you, and just because he works with a camera instead of a computer you are taking a dump on him. Why are you talking about 'whackamole sites...worth a few tens of dollars a year,' when he was outlining a situation in which his Youtube content was worth at least $18,000 a year - I assume it is at least as profitable for Google as it was for him.
Third, have you ever bought billboard, magazine, or TV advertising, where people check out your business as a result but don't necessarily become customers? Have you ever had a brick and mortar business, where people walk in and look around but leave without buying anything? There's a reason for the phrase 'half the money you spend on advertising is wasted, but the problem is that nobody knows which half.' The problem with adwords and so forth is that because you [as a generic advertiser, not you personally) book, see traffic and get billed quickly, it's easy to see exactly whether a campaign is working or not, and then to assume that if it doesn't work it's always the result of fraud.
Some kinds of advertising campaign deliver large sales up front and a long tail, like movies and other consumer media. But those advertising campaigns cost a FORTUNE. If you hear that a film cost $100m to make and did $150m in business' what they usually mean is that it cost $10m to make, $40m was spent on some well-known movie stars whose 'brand' the audience trusts, and $50m was spent on the ad campaign. Spending 50% of the budget on marketing is the norm in the film business, and I imagine it's pretty similar in the music and book publishing fields. Other sorts of advertising are needed for brand building and reinforcement. You (generic you, again) don't have millions to spend so you have to accumulate like an oyster with a pearl. Inevitably, some of your ad buys get exploited by click fraudsters and you are understandably angry when this occurs, since it costs real money. Or it may be something wrong with the targeting or presentation of your message. To assume it must always be click fraud is ridiculous.
The #1 thing that makes me leave a website within seconds of landing (as a consumer) is where I'm on an attractive, well-designed site, see an interesting ad, but clicking on it brings me to an ugly, poorly-designed site. I associate visual ugliness with incompetence and/or fakery, so I'm more likely to think the target page is a work of fraud than the page where the advert appeared. I am no more likely to spend money there than I would in a dirty restaurant or a store without proper fixtures. Because it's easier to create an effective ad than an effective site, an ugly landing page is a red flag for the safety of my credit card. that is no more the fault of the ad host than actual click fraud is the fault of an advertiser.