The logic why it might be better is because Google is now able to alter the CPC on every single bid-auction and determine the best position using it's own artificial intelligence. For instance it uses geographic information and could not show ads to people in New York since the history shows that those convert poorly - as an example. Same goes with time of the day or ad-positioning etc.
I think it can be an incredible powerful bidding method, because CPA is what we are all after and that is directly related to ROI. I just converted 3 of my running campaigns over to CPA and am looking at the effectiveness of that method.
My experience so far is different: one campaign has really improved and nearly doubled ROI. Another, larger campaigns struggles alot and I see a slight decrease in ROI. This campaign is only running for 3 days on CPA bidding now. The third campaign hasn't shown any significant changes so far.
So I'm curious on your experiences with Adwords Conversion Optimizer / CPA bidding.