I've had my run-in with Google AdSense in the past. My prediction: If they don't change their ways this is headed to a huge class-action lawsuit and nothing but bad press.
My experience was interesting and revealing. I had a bunch of domains (about 200) parked with GoDaddy in something called "cash parking". Not a money maker, but, what the heck. Once I realized that this was actually a service provided by Google I decided to look into cutting-out the middle man.
I looked into AdSense and found AdSense for Domains. Exactly the same service being offered by GoDaddy. I took all 200-some domains off GoDaddy, created an AdSense account and parked all of them with Google. They approved every single domain name and put ads on them. Great.
Two days later I get this email about fraudulent activity and the termination of my AdSense account. I appealed. No love. So, the termination was, effectively, forever.
Here's the irony of this story. The same 200 domains had been parked with GoDaddy for months without any issues. Serviced by Google. They even made a few bucks for all involved. The domains were not advertised in any way anywhere. I just parked them and went on with my business. This means that Google was responsible for sending traffic to these sites, every bit of it. About 50 of the domains were political in nature. Being that this was around election time my guess is that they got more traffic than usual, and, I guess, hits. I'll never know because the account was killed within two days of being formed with no data provided whatsoever.
So: Google sends traffic to the sites. The sites get clicks. They close my AdSense account. No appeal, no recourse, no human being to speak to. Bullshit!
Google needs to get sued in a major way to "reset" some of their behaviors. Why? Because they are a de-facto monopoly. Search is dominated by them. Video (YouTube) is dominated by them. Advertising (AdWords and AdSense) is dominated by them.
They do not provide for any intelligent way to deal with problems. They will tell you that you've done something wrong but will NOT provide proof, details nor an opportunity to rectify the problem. A likely scenario is that of someone just getting started who makes a few mistakes and needs to learn. Google does not provide for any of the above. They are judge, jury and executioner and a pretty mean one at that.
This fellow with the boat site probably deserved a slap on the hand for his site. He did no deserve to loose ALL OF HIS INCOME. They could have easily said something like:
"Your site-based per-click revenue is now 10% of normal during a probation period. These are the things you did wrong: link. Here's where you can see the activity and what happened: link. Here are the rules you need to pay attention to: link. The account will be monitored and your earnings percentage slowly increased as we see that these violations are rectified. We look forward to a continued relationship with ".
...A far better approach.
If you are going to shut down someones entire revenue stream you need to have a humane and reasonable process to review the situation and seek resolution rather than hitting someone over the head with a sledge-hammer.
I don't know what will trigger this lawsuit. I do think that it is almost inevitable. They might even need to be broken into different verticals in order to make it all fair. I think they are playing a dangerous game. I think they are playing with fire.
The Google "do no evil" thing may have been a nice idea. However, as it pertains to AdWords/AdSense they are headed straight for evil-land if they keep on this path.
There's another topic: Google censorship. I think that, because they are a monopoly, they don't have the right to censor. They can't be in charge of what is and isn't appropriate on the web. Different issue.