I think pitching in a dollar every year is preferable. Heck, I even pay much more to Youtube to get rid of advertisements. But it does pose a significant threshold for new users.

A hybrid model doesn’t sound too bad to me, where you can pay for an ad free server.

They are popular, because it's a way to squeeze out extra money out of the users (often in addition to paying for the product) and since the software is proprietary the users often can't do anything about it.

Btw notice how most youtubers turned into salesmen that want to sell you something in each video and their sponsored segments are often minutes long.

The ad industry is really secretive in general. There aren't many studies proving that targeted advertising even works. If the data was even slightly in the ad industry's favor, they'd release it. Their entire job is spinning things to look good.

I suspect that targeted advertising was invented to justify the existence of advertising companies as middlemen. Take for example the ExplainXKCD wiki. They just serve their own ads which are usually for tech products trying to reach Sysadmins. If every company did this, the ad industry would wilt.

your post is very interesting for me to consider