I think it's not 1.20 for a paid install. Buying users can cost quite a bit more for paid apps (for instance I know from googling that Flurry's 'buy user' service doesn't work very well for paid apps).

But in the end, it's just a mad rush to be on the charts to get organics. Without that, it's kind of difficult with apps to make your money back from ad spending. It's not like you are advertising a hotel room where one purchase through your adwords can net you a 100+ dollars (plus all the room service that person will consume!). In apps, typically, you lose money buying users (if you were only counting ad-spend vs revenue from those users that installed).