There seems to be a distinct difference between niche site and micro niche site, the latter being one that has 5 pages that are usually made for adsense with a long exact match domain. Essentially it seems that these sites were gaming the system, and did so successfully for quite a period of time, until now. Now it seems that the niche sites, the ones that were still centered around a narrow topic, but had more content and fostered greater engagement and involvement from users seem to be still here.
It therefore seems that if it is a battle between
10 niche sites built lovingly with lots of good content, vs 100 niche sitess built less lovingly with less content and a concentration on adsense revenue, the former would win and has done.
There also seems to be a very large advantage of having fewer niche sites from many perspectives, you have less sites to manage, less domains to renew, can concentrate on quality more easily, and so on.
Personally, I am quite surprised it has taken this long for Google to start penalising sites that are not helping users and growing the internet in the right way.
It seems therefore that this isnt just a lesson about adsense and google, it is a life lesson.
Which is that the best way to a sustainable business and long term riches is to always provide quality and serve users problems properly amongst everything else. If you make the users the priority and the revenue the afterthought you will be in a better position to make some serious money in the long term.
Facebook wasnt built to support ads, facebook was built to serve a purpose and provide some serious value to people, the revenue and profit generation was its second purpose, and because it was helping so many people, in the process it became very very profitable.
I hope this helps people, I dont know how much of it people are going to agree with, just writing it helped me realise things and put things in to perspective.