Another argument would be that advertising allowed the internet to develop as it is, to the scale it is. It's impossible to separate the accessibility, progress, UX, and information available from the core business model that enabled so much of it.
If ads had never been allowed, would search be more like AOl's keywords? Would we still be limited to 10MB in email storage? Think what you will, but Google has developed a ton of impressive technology and open sourced quite a bit of it; they have been much more open stewards than I would expect if AOL and IBM and Microsoft built out the internet.
(They have also given everyone a ton of value without asking for money from users -- it's important to not underestimate how far we've come on the backs of the ad dollar).
It might be a faustian bargain, or it might not be.