This is a pretty status quo biased view. Maybe stronger privacy protection enables a startup search engine (or whatever) with a more privacy oriented funding method which wasn't thought viable before.
I think people are misconstruing me here. I'm not saying Google advertising is somehow fundamentally necessary to the economy. I'm just saying that it is straight up incorrect to think that there aren't legitimate downsides to removing their ability to police fraud.
But there are also (potentially huge and beneficial) opportunity costs. We will never see alternative business models which are not viable in the existing ecosystem.