Yeah, Google has really been expanding the real estate given to paid ads vs natural search results. My guess is they've seen a big shift from natural results to paid results. At some point, though, people will start to believe the value of the search page has suffered.

For the last ~2 years Google has been rolling out changes slightly before earnings are released each quarter. For example, the yellow Ad label a few months ago, and it is likely to switch to Green to blend in with the Advertiser's Display URL.

Last week Google Maps Ads switched status from being in Search Partners to being included in ALL AdWords campaigns with Location Ad Extensions. Now Google is displaying ads in Map search results. There are also 4 results on top, 3 on bottom with no sidebar, this reduced inventory in an attempt to drive up CPCs. I've seen CPCs increase 10-15% because of this over the last month. There are also queries that return 7 paid results and only 9 organic results.

Google isn't innovating, they're just making ads appear as similar to organic results as humanly possible (if you're a webmaster, you'll get penalized for this) and making sure ads are everywhere possible. Baidu's results have paid listings interspersed without labels, which is what Google is on track to do within 2 years. They're great at equivocating. They penalize sites that build links, yet they themselves send emails soliciting KW heavy anchor text to Play vendors. They'll also look the other way if you're a Google Ventures funded company caught blatantly "spamming", a la Thumbtack and Nest.

Mobile CPCs are still roughly 30% lower than desktop, but it doesn't convert nearly as well, so it is worth less. As already mentioned, Google isn't growing search volume, rather increasing the number of ads they're showing, so say 7 ads per page on 1st, 2nd and 3rd pages of results, versus 13 on 1st page and 3 on 2nd, none on 3rd. If your organic results just happen to get worse, users have to dig deeper into the SERPs to find what they're looking for, while also driving an increase in impressions.

More likely they ran a few experiments putting more on, and the statistics said more people clicked them. I doubt it's actually that users have a preference towards paid results

You should check hotels related search on mobile. Page 1 is ads, scroll to 2nd page and it's Google's own hotel booking module which I would argue is ad as well.

I watch users all day click on the top link regardless of whether it says its an ad or not.