Don't underestimate how bad bad ads can be. I turned off targeted advertising on my Android phone for a while. The result was that around 50% of ad banners I saw were ultra-spammy strobing things--presumably the only ones that will pay for untargeted ads--making apps with built-in ad banners essentially unusable. I wound up changing back. That may have been the intention.
(An Android ad blocker would probably work best, but getting one running on my ancient phone was more hassle than I wanted.)
There are two possible transactions: selling you ads, or selling you to a better class of advertisers.
I see parallels to the 3rd class rail (or coach-class air) problem. If you improve the conditions of the lowest service class, nobody upgrades to higher levels of service. So the lowest class is intentionally bad.
(An Android ad blocker would probably work best, but getting one running on my ancient phone was more hassle than I wanted.)