Yeah, that's the trap's only weakness, and why I built the squid trap waaaaaaaaay over in the boonies. Squid will spawn anywhere from sea-level down to around 40, I think, in any standing water out to 128 from the player. Because the trap is less than 256 square, there are a bazillion squid spawning in the waters immediately around it, but very few within the trap's water-spawner. Thus, the low ink numbers.
Only way to fix that problem would be to empty out the ocean around the trap. Grey doesn't want to do that, and he sure as hell won't let me do it!
So, SQUID FARM!