I don't think competition would solve this, because most people would just take the ads offer and from a business perspective there's 0 reason to offer an ad-fr

I don't think competition would solve this, because most people would just take the ads offer and from a business perspective there's 0 reason to offer an ad-free option. Of course, consumers cannot possibly estimate the cost of ads. They can't tell how much of the stuff they buy is because they're influenced, or how many years of life they throw away by watching ads in the long run. Ads could be costing them 1 dollar a year, or maybe 1,000. But they don't know, and they sure as hell won't be paying 5 bucks for a product if there's a "free" ad version.