That's the biggest problem of all: although they may have improved in the past few years, Google's filters to keep out scam sites aren't even borderline adequate anyway.
Google "HYIP" and click on one of the ads if you want to find a website to help you give your money to criminals operating Ponzi schemes. Now granted, a lot of people searching for implausibly high yield investment plans are aware of the rules of the shady game they're getting into, but they really ought to be triggering more filters and failing more manual reviews than bingo card creation.
Well they need to fix something because the essay farms were getting through. I think my suggestion would work. I'm sure they could find some heuristics for identifying marketers who might be trying to game them based on trust (say, ads that don't stay active long enough for a reviewer to see in order to sneak by). And it's a huge risk for me to get caught, even once.
If an inappropriate ad gets through it could (potentially) lead to a major PR disaster for Google.
Whereas you being unhappy with the product or the process really makes no difference to Google, since they are the only game in town.
(For the record I'm really not "defending" them; I just try to understand their incentives).