Clearly those unspecified other ways aren't working well enough, or ads wouldn't be so dominant.

The problem is that the advertising way is "cheating" in the sense that its victims are not aware they're being exploited; otherwise this article wouldn't have been written and the proposed UI change (which aims to shine light on what the advertising industry is doing with your personal data) wouldn't cause such an uproar.

There are areas where a totally "free market" doesn't work in the long-term benefit of society and regulation typically steps in. This is why for example health and safety is a thing (even though not caring about that would make businesses more profitable) or that in most civilized countries you are not allowed to dump toxic waste in the river even though it's cheaper than paying to have it recycled.