Comment on Making Money Through Affiliate Marketing by SEO Dave.
** Fortunately I realised my mistake of using blackhat SEO techniques and expected the domain to be banned and had began to move on in advance. Pretty much the month I was ready for the ban the domain was banned.
By spreading your thin affiliate content over a lot of sites you spread the Google penalty risk. This is particularly important if you tend to push the limits of what Google considers acceptable: Google search engine is after all their business and if they don’t want to list a domain because they don’t like it, not a lot we can do about it.
Ignoring affiliate content, then there’s niche content, I’ve found a domain with the format keyword1-keyword2.tld is easier to get ranked for the phrase keyword1 keyword2 than a corresponding page with the same file name format. If I put all my content on one domain it would be 10s of thousands of pages (just uploaded a new recipe site today with 130,000+ recipes). Imagine the mess one domain would be with all that content over so many niches.
That being said in theory if I had everything on one domain and had the same links I have now to all my sites going to that one domain it would almost certainly rank better overall than all my sites put together (AKA it should in theory make more money). But it’s too much of a risk.
You are also to some degree wrong about one high traffic site worth more than 10 low traffic sites, especially when thinking about AdSense. All depends what the sites are about, I have domains with a couple of hundred visitors a day that are making more money from AdSense than domains with 10x the traffic because of the niche. If all that content was combined on one site some of the higher paying AdSense content might not get the best ads. Basically more varied your content more likely Google AdSense ads won’t match your content, with AdSense in mind highly niched sites work best.