is it possible their cpc went down because they've overwhored themselves and not the other way around? I seem to recall a shit ton of changes to SERPs preceding and during the periods mentioned.
Absolutely, but Google runs experiments all the time. If underwhoring would boost their CPC then those experiments will surface that fact. That it hasn't suggested to me that alternatives have cut into their margins. Since nobody likes to cede margin, they can either ride it into the ground (a common response) or change. Either way it will be different.
