We have fabricated a series of thin (~50 nm) erbium-doped (by ion implantation) silicon-rich oxide films in the configuration that mitigates previously proposed mechanisms for loss of light emission capability of erbium ions. By combining the methods of optical, structural and electrical analysis, we identify the erbium ion clustering as a driving mechanism to low optical performance of this material. Experimental findings in this work clearly evidence inadequacy of the commonly employed optimization procedure when optical amplification is considered. We reveal that the significantly lower erbium ion concentrations are to be used in order to fully exploit the potential of this approach and achieve net optical gain.