What makes you think that ad blockers wouldn't also block contextual ads?
With non-surveliance based ads, they can make the ads completely indistinguishable from normal content in their CMS and make it look like first party content and server side based. And since the user info will be minimal beyond an IP, it will mostly be content based vs. user based. They can even do things like podcasts & youtubes videos do with sponsorships that come with the content.
They don't do it because it doesn't make as much money as the current status quo and would require more work to integrate if it was offered.