First of all, this is just the latest in a string of changes Google AdWords has made to eliminate advertiser control, all in the name of "simplification" or marketed as an "upgrade".
Anyone who is actively involved in paid search understands why this is a bad move. This was already a "default" option, so unsophisticated and inexpereienced marketers already were not excluding this option. However the 3-5% of large and very experienced advertisers who excluded this option in specific instances had a very good reason to do so!
This change is double impacted for those long sales cycles like B2B where advertisers first "conversion" is never the $$ conversion so they need to track how keywords/queries perform over time, in a system outside of AdWords (like a CRM). Why? Well earlier this year AdWords also decided to exclude Paid Advertisers from seeing search queries in the referring URL, which is how you were able to track query to conversion not keyword in long sales cycles.
This made exact match keywords even more important because that was the only paramater left that you could easily pass into the CRM or other system outside of AdWords to track long sales cycles. Now that has been eliminated.
Bottom-line this is bad for advanced advertisers and should be rolled back so those of us who "know what we are doing" can still do what we do best!
Join other PPC Practitioners and tell Google that we are tired of the "improvements" they have been making.
For more reasons why this isn't "good" check out this blog post from Brad Geddes - http://certifiedknowledge.org/blog/adwords-is-forcing-variation-match-upon-you-this-is-why-its-a-terrible-idea/
We are tired of you taking our ability to effectively control our spend and optimize performance on AdWords!