I really like Matt Cutts. No. I'm not going to try and pretend we're super buddies - I don't know him at all on a personal level. However, from his blog and presentations at S conferences it is clear to me that he's a man with conviction. He really wants Google to do the right thing. He really wants to look after webmasters. He really cares. That's a passion. That's a conviction.
An aside comment from Matt on his own blog.
I’ve also pressed to reduce low-quality publishers in AdSense, too.
That's my emphasis. The comment caught my attention because I know small webmasters who have been removed (ie, reduced) from Google AdSense for fake clickthroughs even though they'll protest until they're blue in the fact that they've not been engaged in any click fraud. I'm sure in some cases there were 'automated clicks' from some of the sites but probably due to people scraping them rather than the webmaster trying to trick Google.
I just know that some of these webmasters are going to seize on this. They're going to claim that Google cooked up fake click charges to kick them off the network because they were too small.
Gosh. I don't know. I suppose it all depends on whether Google did decide to reduce small publishers or what a reduction could mean. You could reduce the percentage of small publishers by stop approving new ones. That wouldn't involve kicking out new ones.
My gut feeling is that the organic search / web quality guys wouldn't cook up charges to get people kicked off AdSense. That's just not what I associated with Matt Cutts and the old crew. In fact, I'm pretty sure Matt Cutts is the type of guy who'd be upset if Google actually did something like that. As I said; I admire his conviction.
I'm not so sure about some of the newer recruits into the paid search side of things (as Google gears up to take on the agencies some of the new blood are more mercenary) but I'm sure Google could (and would) just close the account (because they can) due to a lack of success. There are plenty of affiliate networks that'll pause or kill your account if you do don't perform well enough as a publisher.
Anyway, hopefully we'll see Yahoo extend their network (like to Europe, hello guys, Europe - that weathly continent which you're struggling in), Amazon and Live search push theirs. We even have sites like Lastminute launching their own content networks. If Google decides you're too small a publisher to satisfy the advertisers then, (hopefully) soon, there will be alternatives.