Let click fraud happen says Google chairman
Lots of click fraud means less money for the advertiser from the clicks they get, causing the advertiser to pay less per click, reducing the incentive for click fraud.
(Which then means more money for the advertiser from the clicks they get, resulting in the advertiser paying more per click, increasing click fraud. But never mind that).
But apparently he was being hypothetical. So say Google anyway as they back track as fast as they can.