The problem with ad companies is not that they show ads. But that they are trying to paint a perfect picture of you to sell you stuff. And they are painting that picture by spying on you and your peers.
I hope that you can see the difference between spying on your users and selling that data to advertisers and using telemetry in some product. If you ever worked in software you will know that having telemetry can lead to massive improvements in the product. That said, that data has to be confined to the applicable use case and has to be anonymized.
If you really think there is no difference between ad tracking and telemetry you are right. Apple is a lot worse than people think, but better than Google/Facebook.
But if we are talking just about ads, than Apple is definitely not worse than people think. Because they hardly even have an ad network and when they ask you if you want to be tracked you can just select "No".