Germany's national broadcaster Deutsche Welle produced an excellent documentary looking at the exact same scenario you described. [0]
It looked into the possibility of making short-haul transportation (focusing primarily on Hyperloop) virtually free with just one caveat: a precondition that users share all their private data that advertisers might find valuable -- free ride in exchange for ad-targetable data -- scary and intriguing at the same time.
The point isn't if the companies behave responsibly or not. Google for example has behaved responsibly with user data, exemplary in fact and I'm sure they'll continue to do so. Yet companies like Google are and will continue to be a danger for everything you know and love.
It's not how you use the data that's problematic, although companies like Facebook should suffer for their blunders, but rather that the data exists in the first place.
Are you part of a minority? Do you have some weird sexual preference or an affair? Are you a woman or gay? Are your religious views mainstream? Have you ever traveled to an Arab country or to Israel? All of these, in the right context, can put your life at risk. It's all an issue of place and timing.
You can also imagine more benign usage, like insurance companies raising their rates or banks calculating your credit score based on where you travel or your movie preferences. Heck, that's already happening.
Yes, many companies can behave responsibly. They can do so today, but what happens tomorrow, or how about in 10 years from now? What happens when those companies are being bought by bigger, less responsible ones. It happened before and it will keep happening ;-)
Targeting is about maximizing profits for the advertisers, it's not about maximizing value to you. If they can use targeting to take value from you in order to give it to themselves, they will. For instance, you could be bombarded with targeted ads for product A when you'd really be happier with product B. You can contrive scenarios where ad targeting is a win-win, but those scenarios are misleading because they go against the underlying incentives.
I wouldn't mind a neutral, personalized product recommendation engine, but that's not what ad targeting is.
All the information collected in service of figuring out what to advertise to you will ultimately be used for all sorts of things many of which could be to your disadvantage.
In the end you wont even know why you were denied that car loan, that job, that place to live, why you weren't deemed credible by the cops or why you were sentenced to the maximum instead of offered probation. The oracle just told the car company, the employer, the landlord, the cops, and the prosecutor what to do at different junctures based decisions that not even the people running the computer can fully explain.