And if they could do it workout gathering that much personal data? Isn't that what FLOC is trying to do?

That's what FLoC is trying and failing to do according to basically every analysis, including this one. Ads can exist without having to be based on users' personal data, as they were for 100+ years before (even on the internet itself, they used to be based on the content of the site rather than users' personal data)

An internet with no ads will have much less content.

Most content is being produced by end users that are paid nothing. In the early says of the internet, when there was no advertising, there was plenty of content. But what made the internet truly exciting was not the "content" but the potential ability to communicate and share with people anywhere in the world without expensive telephone calls or slow postal service. Think of the internet not as a "destination" but as a medium. It is a way to reach someone, like a telephone line, but with much greater capabilities. (Originally, that is how we accessed it, over telephone lines.) The internet is not a collection of popular websites run by companies that spy on you for the purposes of online advertising. They are just middlemen exploiting that desire of users to connect with each other. They sit in the middle and spy on everything. The internet is a medium, not a collection of middlemen. When you remove the ads, the "business model" of the middlmen disappears, and the incentive for spying is reduced.

True but probably a lot better content. It would disincentivise clickbait.

Imagine a world where OpenStreetMap is financially sustainable but Google maps were not. That's where we would be without ads, and it's beautiful.

That's a false dichotomy. You can have ads without tracking user activity; for example, contextual ads.

OK, so someone has "my data", ie a partial list of websites I may have visited. Now what? What harm has been caused to me?