The problem isn't X will like product Y, so lets show ads for product Y to them. The problem is X will like features A, B, and C and hate D, so lets mention only A, B, and C to them. Y will like B and D and hate A and C, so only mention B and D to them.

If you're having trouble thinking of why someone might hate a feature of a product, the main case where this is a problem is political advertising, where features are policies. It is a problem with commercial advertising too, though.

EDIT: The other big problem is using tracking for price discrimination, but banning targeted ads wouldn't help there, you have to ban the tracking.