Good points and nice to see you posting again Brent.
"Efficiency" is the key word here. If you find some keywords where you can generate large amounts of traffic very cheaply and easily (with little effort of your own), then by all means go for it. I know several people who make a good living by not targeting any niches at all - they just throw up completely random and generic doorway pages and get traffic for completely random stuff, cloak it and redirect to full pages ads for a variety of general appeal CPA offers. The margins are lower than targeted traffic, but because the pages take zero effort to create, it's still a workable methodology.
However if it's going to take just as much effort to rank for your generic terms as for targeted, product oriented terms, you may as well go for targeted because the sales are easier and the margins are higher.
I'd add that it will probably be very, very difficult to rank for super generic terms like "humor." You might not see specific anchor text competition, but the terms are so broad and so huge that the real authority sites have the serps locked up. For the "humor" example, you're going up against about.com, yahoo directory, the onion... Stiff competition.
