Integrating ads with your app isn't merely trying to manipulate your users in a way that is liable to exploit, harm, disadvantage, or oppose their interests. It is virtually certainly compromising their privacy in a fashion that isn't immediately obvious and opening up a security hole that may be used to harm them further.
The first and most obvious clue that what you are considering is wrong is the fact that you are admitting that if people were presented with a choice they would overwhelmingly opt out of such a system so pervasively that there wouldn't be any money in it at all.
> That would effectively make it impossible for single/small dev teams to justify making apps for the Play store.
This is an inversion of priorities. The dev's profession exits to create useful things for users. The users don't exist to enable the devs profession. If the only way an app can come into existence is through the exploitation and disadvantage of its users then the world would be better off if it didn't exist.