this guy created a whole site because of the problem and the iPhones inability to block/stop such behaviour
I'm not sure if you saw the portion of our article that develops the estimate and presents the methodology for the estimate. If not, that might be of interest.
As you say, it's hard to make a precise estimate. There are important pieces of data uniquely within Google's custody, and Google isn't talking. But in these circumstances, I do feel it's appropriate to make a good-faith estimate. If you think our numbers are in error, feel free to identify which specific numbers you think are off, in which direction, and for what reason. But realize that for every number you think is too high, there is likely to be another that might be too low. (We discuss some of these complications in the page linked above.) I don't think it's clear from first principles that our estimate is biased in one way or the other.
Surely it's not Google's fault that some people misspell. But our study shos that typosquatters register more domains targeting companies in sectors with high PPC prices. That tells us that PPC funding is *causing* and *exacerbating* typosquatting. Without PPC payments, there would be fewer typosquatting registrations -- much less reason for squatters to register these domains. Google's payments put the system in motion; squatters register domains exactly in anticipation of getting paid by Google. Google knows where it's showing ads. (Example: Google shows Expedia ads if you misspell Expedia, but Travelocity ads if you misspell Travelocity!) So it's natural to look to Google for resolution of these problems.
Incidentally, the federal ACPA statute is squarely on point: Your elected congressmen chose to prohibit not just "register[ing]" domains but also "us[ing]" domains. Showing ads on domains is surely a kind of "use."
So is Google "just offering an ad service"? No! Google analyzes a user's request, assess what domain the user was trying to reach, and selects ads accordingly. Google bills advertisers for each click and passes payment on to the typosquatters. These are proper reasons for the concerned public to demand more of Google.
The trouble with computers is that they do what you tell them, not what you want. -- D. Cohen