If one has a big enough PPC Budget, what could possibly be wrong with bidding on so many Keywords? An emphasis on Broad, “Fat Head” matches, no Negative Keywords deployment, and indiscriminate use of automation/Dynamic Keyword Insertion leads to the display of ineffective/unfortunate advertising.
A year ago, while conducting an online search for a baby-sitter, one of our PPC consultants came across an ad touting “Babysitters for sale or lease!”
In our experience, such ads are created automatically by tools that generate Keywords based on actual searches and general Text Ads. Thus, you end up with Ad Groups that contain a ridiculous number of Keywords (thousands upon thousands, usually unrelated to one another) and PPC Campaigns that are next to impossible to effectively manage or control.
Here are some more recent examples:
A search for boy triggered the offer “Discount Boy on Sale!” when the company was really selling boys clothing.
A company selling plumbing supplies showed up for the search buy stuff.
One of the largest online bookstores showed up for pet. Worse, look at the display URL. What does a patio have to do with a pet, or even books?
Such examples tend to be easy to find if you do a few searches on general Keywords. Then again, once in a while, you'll get a gem on a more specific search when you're least expecting it.
By all means, leverage PPC Automation when you need to save on manpower, but do not do it at the expense of effectiveness. When your PPC Campaigns are not properly optimized, you wind up with PPC Keywords Gone Wild.
The stories you have seen are true; only the company names have been erased to protect the ignorant.