Heh, i love how people tend to forget about history. Let's say you're in the business of selling laptop computers. You have choices on where you can advertise. You could run an ad in the South Sheboygan Penny Picaune (serving the Happy Pines Mall for over a Week) or the New York Times, read by millions. One costs more than the other, but you get wider distribution. Plus, if you run your full page ad somewhere like the New York Times, you're probably going to get a bit more credibility than a paper that sells ads by ladies with a very different sort of laptop service in mind.
In fact, that's why papers such as the New York Times have ad buying policies. They understand that whatever service or product they advertise, they are in effect endorsing. Yes, most people understand it's just an ad and that money has been exchanged for eyeballs, but you're not going to see ads for Larry's Discount House of KKK Supplies regardless of how much money they offer.
So, naturally, i have to giggle pretty hard about the whole NOFOLLOW ad link controversy. Part of what Jeremy is selling is the fact that your site gets a boost of his credibility. It's the online equivalent of the sort of minor credibility boost one gets from running an ad in a large newspaper. Likewise, it's the same sort of thing that advertisers have been doing since they figured out that they could buy ads. Putting a "NOFOLLOW" tag on something effectively cheapens the ad value.
What Jeremy is doing is the same thing as a Morning DeeJay doing a spot for a mattress company or a TV show character talking about how comfy Brand X shoes are. You pony up extra, you get that extra love.
Whether or not anyone puts some sort of editorial tag on their ads is pretty much just that, an editorial decision. My editorial decision is to not run any commercial ads, but there are plenty of ads for other sites i like, none of which have "NOFOLLOW" tags applied to them.
Heck, i still find it kind of funny how folks are basically saying "Our stuff is broken and we don't know how to fix it. Solve the problem for us by telling us what we should do" and then screaming when other folks don't do it.
Ah well, i suppose that's the fun of having the Ethical Circus come to town.