I'm not going to answer this in regard to Facebook specifically, because I can't imagine a circumstance where I would be willing to use a Facebook product.

But since this idea has been brought up by a number of ad companies (Google, most notably), I can answer in the more general sense.

I would not support ad targeting done that way. It is a bit less objectionable, but it doesn't really address my objections to the entire practice.

Framing it in terms of business models and inevitability dodges the question of whether they should be doing it in the first place.

You mean, should free advertising-subsidized services even exist?

As if this were the only way to support such a service...

How about we techies stop kissing ass to the advertising execs and stand up to them for once??

They want more data, more relevant ads, more more more more more. Their ask is impossible without massive invasions of privacy. Fuck them, I say

Return to scattershot ads, they can understand me as an audience without having to mine every ounce of my life for it. That approach will produce more relevant ads for me anyway

Mining and storing user data is in no way a requirement to run ads.

So using data for optimization should be banned?

Obvious false equivalence. Just because we protect collecting/using certain data in certain contexts where we believe it does more harm than good doesn't mean we have to ban all data collection/use.

You specifically stipulated that the data optimization was bad - then why is data optimization of ads harmful? Doesn't serving relevant ads have more utility?

I made no such claim. You acted like tracking users was required to run an ad-based website, I pointed out that running ads does not require tracking users.

I am not sure if I'd be willing to make the argument we should ban (as in make illegal) collection of user data, but acting like such data is required to run ads is ridiculous.