I don't want to successfully reach your bullshit ad host. I don't want to get successfully served an ad instead of timing out. I just want to fail.
Any other behavior is wrong.
I assume you ask this honestly.
The problem isn't something like "Oh, hey, well, there's some empty space so let's setup a lemonade stand until someone buys up the property." The address is supposed to be valid, or fail fast. It is of much greater utility to everyone (except the ad farmers) to fail fast.
No it isn't yours in an extreme minority edge case compared to most internet users. Users don't want a blank page with just a weird code on it.
They want links to click to get to the page that they meant to type in, or failing that a similar page link supplied by their ISP ...
This page does not exist. Did you mean '...'?
Which most modern browsers give them provided their ISP does not hijack the NX response to present their ads.
This "average user"? Frankly, we've had the 'net for like fifteen years--now's a good a time for users to learn as any.
Unless, of course, you prefer to spoonfeed the next generation of consumer whores?
User make mistakes, domains are abandoned - for those cases this provides a simple service which reduces user effort.
Do I want to spoonfeed a generation of consumer whores? Would love to. But I suspect they like errant toddlers would spit out my message of anti-consumerism, sustainability, social action, fair trade ...