Putting ads above the fold makes a site worse for users. This doesn't mean it's immoral, and it doesn't mean it's the wrong thing to do. You are trading of the amount of value you provide and ability to capture a portion of that value. Capturing value can be essential to continued existence of the site, and ability to create more content.

However, Google search is acting on behalf of the users, trying to find them the result that brings them the most value. And everything else equal, that is the one without ads above the fold.