That might generate a high CTR, but the Keyword Relevancy penalty keeps that from happening.
Assuming that the Keywords are targeted to the advertisers products/services, CTR and Relevancy will move together.
By improving your CTR relative to other advertisers and other CTR benchmarks, in any regime that multiplies keyword CTR (or Quality Score) by your bid to arrive at your ad rank, you will outrank lower-CTR competitors, all else including bids being equal.
:) Brad Geddes: At a high level it's not bad when everything is good in the account.
When the landing page or your ad copy is considered not relevant; those two items can affect your ad much more than the percentages laid out by Hal Varian.
As displayed quality score is a 1-10 number; there is no way a bad landing page equates a 10% reduction in your overall quality score.
The same argument can be made for ad copy relevance.
Hal makes a fine talking egghead without clarifying anything not published in Ad Words Help.