Ask HN: how does adtrap work?

As an experienced developer I have no idea how adtrap would work. Sure, they could just block ad-domains via DNS - but with 256 MB RAM and a 720 MHz CPU they would really use a LOT of hardware for just rerouting DNS queries. And then there is DNSSEC looming on the horizon. To filter ads from in-request content: how can this work with HTTPS traffic?

Anyone having any ideas? How would you build such a device?