However like you said, the problem is not the ads themselves it is the tracking that comes along for the ride.
There isn't any inherent reason that ads have to be so privacy invasive (I guess it is hard to not have ads at least log your requests when they go to a different server but that alone is normal I guess).
It is unfortunate that is seems the ship has sailed on actually privacy focused ads and instead of being tailored to the user they are just tailored to the content on the page/video/whatever. I would allow those ads if they existed.
It sucks since I do think ads are important, website operators need some way to make money and it is clear that most people are not going to pay for the things they have grown accustom to getting for free. But the current solution is so privacy invasive that you have to block it.