Thank you for taking the time to write and screenshot this.
I generally see great promise in the ad platform.
FB lets you target based on occupation (or likely keyword match in their profile) in a way you can't with Adwords, which for some markets, is pretty cool... in theory.
In real life, everybody I know is finding FB too expensive to leverage, and posts like yours are explaining why.
As somebody else in this thread pointed out, even if FB cleans this up, they're risking alienating all advertisers away from ever trusting the efficacy of the platform.
If low inventory is the problem, they should be giving early advertisers more of a "free ride," with cheap repeats.