Good. The alternative is a managerie of different ad networks all collecting sensitive data about me. I'm unambiguously in favor of Apple not allowing new location-aware ad tracking networks.
Apple is just banning the competition for analysis of said data so they can be the only game in town and "control the user experience" as they like to call it. I wouldn't be surprised if iAd included an analytics dashboard when it's released to the public.
But in the sense you're talking about - if you care about someone buying your "mined personality profile", wouldn't you rather have 10 incomplete profiles out there than 1 really accurate one?
Right now the mobile ad market can work with your approximate age, your gender, your location down to the city level at most, and very high-level interests derived from the site or app you happen to be using at the time. Anything else is too finely grained to sell meaningful volumes of advertising against and therefore not wanted.
I'm guessing people take the reality of the online ad market and falsely assume the mobile market is there as well.
This isn't good for anyone but Apple.
Were I implementing mobile ads, the precise location would stay on the device, and the information sent to the ad server would be city or at least zip level.