It's also a dilemma of sorts. If you stop running ads, then there is one less outlet for them, which means rates for all the other outlets are likely to grow. If enough people do it, the few players left will make very good business. Would you rather move out, risking your livelihood on experimental business models, or stay in with the devil you know, ensuring nobody is going to do better than you?
What you mean is running 3rd party ads via ad networks.
It's perfectly feasible to show an image that links to some advertiser's site for a negotiated fee. This is the equivalent of a paper magazine with advertisements. Not renting out injection points to executing whatever foreign code on their visitor's devices.
My ad blocker won't even block it (well not by default, and only as long as you play nice, it's not like online advertising has any goodwill left over, or ever acted to deserve it).
Sure, maybe that's exactly what would happen, but changing one variable in a toy model is not proof that it will.
There are successful news sites that do just fine without becoming relentless clickbait optimization mills - and in fact, those are exactly the sites I tend to read. Two examples, so we're talking about something specific: talkingpointsmemo.com and techdirt.com are both daily reads for me.
TPM is, for want of a better term, the more advertiser-friendly of the two, but it intentionally works fine with ad blockers. Techdirt is probably well-known to most folks here.
The other commonality is that both of them work hard to not be enslaved by the adtech surveillance machine - they both have non-ad revenue streams.
And I think that is the real trick missed by overly simple reasoning - even when it is correct (and it is, frequently), it obscures more than it helps. And somewhat more nebulously, I think it trains people into a way of thinking that blinds them to options. After all, if you "know" you can't reduce your surveillance metrics below industry-average intrusiveness, you won't look at possibilities involving doing so. Instead, you'd look at additional non-ad revenue as "more and better" and do both - thereby losing me as a potential customer.
Is that a good tradeoff? I don't know - and that's the point. These are much more complicated questions than econ 101 will guide you through.