I'm an online publisher who has a significant percentage of income that comes via advertising and I think ad blocking is a good force for the Web. I don't use it, but I don't have a problem with those who do.
Ad blockers typically block poorly performing display advertising (the CTRs on banners nowadays is ridiculously low and the levels of recall have been shown to be abysmally low in studies) and text link advertising from the big networks.
Ad blockers typically do not block 'content marketing', videos on sites like YouTube, editorial mentions of products, references to products and services within content, adverts in podcasts, job ads (usually), sponsors in e-mail newsletters, and a whole myriad of other ways that smart advertisers and publishers are using.
It's about time we killed off mass market display advertising online. Why? Because it gives publishers an incentive to actually work to provide experiences that benefit both readers and advertisers and not sit on their fat asses collecting checks for doing sod all.
Increasingly, though, reputable media organizations are doing collaborations with brands, such as with merchandise, pull outs, giveaways, or in clearly marked 'products we like' sections (essentially advertising as content - super popular in fashion and women's magazines). It's a rapidly spreading model in the magazine space in particular. Monocle magazine is one of the exemplary examples - http://www.reallypractical.com/2009/07/06/is-monocle-the-fut...
The big traffic/small CPM model is still too lucrative online for the bigger online publishers to spend too much time on the newer ideas, but the hands of other media have been forced by tumbling revenues and, in a funny twist, are becoming more progressive.
On quality, though, the readership will ultimately vote with their feet (or clicks) - outlets that fall into the payola trap will suffer audience drops and legal trouble, outlets that transparently entertain or inform their readership in conjunction with advertisers will thrive (as Monocle is).
Separate from pairing up with media outlets, many advertisers are now going 'direct' to audiences with content-driven campaigns (not just videos, but entire content sites). Digitally prodigious companies and startups have been doing this for ages with blogs and the like, but the approach is now becoming mainstream and being taken on by the big brands.
Ad blockers are next to useless on all of this but, IMHO, the end result is better. Outlets and brands have to start telling interesting stories and sharing interesting content, instead of tricking us into clicking graphics and becoming leads.
They must or it wouldn't be a profitable system. Strange.