I'd imagine that they are going down.
In my mind the scenario goes like this:
Someone wants to search for "blue widgets size twelve", they type "blue" and get served ads. At this point the see ads and some will click on one. Obviously the searcher isn't very likely to find what they want from such a broadly matched ad, so he hits the back button and continues to type "blue widg..." then another serp appears this time more relevant, he then clicks on the top spot and sees something that is closer to what he was expecting. He may buy here or not. If he doesn't then he adds more terms to his search and finally gets to "blue widgets size twelve", goes again to the top spot and most likely settles there for the purchase.
Obviously, not everybody will do searches like this, but I bet a good number do. Maybe even 5%. So, what we have is the EPC going down for the advertisers, the searcher clicking on the free results even less, and ads being displayed three times as much will less relevant targeting. Also, you have the shorter and often more expensive terms being displayed before the long tail terms get shown. Brilliant for Google, pretty bad for everyone else.