> privacy nightmares and ethical issues like allowing targeting alcoholics with alcohol ads
These two statements are diametrically opposing each other. Either targeted advertising works or it doesn't. You can't say that it isn't valuable and then raise concerns about how it causes privacy nightmares and alcoholics to buy more alcohol.
Alcoholics will buy more alcohol either ways. Targeting makes no difference to their behavior really. But your argument holds no ground because alcohol ads are highly regulated. You can read more about why here: [1]. More often than not advertising companies reject alcohol ads as it hurts their business more than it helps (due to stringent regulations in most parts of the World). It is not as easy as you make it out to be. Else your social media pages should be inundated with alcohol ads. It is not.
I strongly believe that there should be regulations on the content of the ads that are pushed out (just like the alcohol ads). There should be regulation on how often an ad can be retargeted and to ensure that the placements don't hamper user productivity. Blanket bans on advertising methods just for sake of privacy is going to do more harm than good. There has to be some sort of a balance. For people who want privacy they can opt for privacy focused social networks. But if entire platforms move towards privacy then the advertising industry will collapse completely. Targeted advertising is the cheapest way for small and medium businesses to get new customers. It levels the playing field with corporations with big pockets. If you move towards privacy as a focus point with no proper alternatives to advertising it will cause a major shakeup. Many businesses will shutdown. You'll have more consolidation and less competition. Only those with big pockets can advertise their products/services. And in the post-Corona World, this is a lifeline to many small businesses.
[1]: https://support.google.com/adspolicy/answer/6012382?hl=en