Ultimately the money comes from a mark further down the line. For example some poor sucker desperate to fix their health problem spends hundreds on a flakey high margin product, be it physical or digital.

Sure there are legit ads too but I'd guess the greyhat stuff will give higher EPC.

Google ads takes the long term view and doesn't tolerate shit like that. They are very strict and would rather not take that money and destroy their brand. Result? People still use Google to search for stuff.