Considering that ad blocking extensions still exist, yes. The browser (user agent) is supposed to act on the behalf of the user, not the remote server. It's not required to use cookies, display ads or run malicious code.
On what grounds would an ad company sue Google for a change in Chromium that enhances the user's privacy, while they can still display ads (just not track the users as much)?
Almost anyone other than Google can make this change without major legal worries, but because Google is in both the ads market and a browser vendor they can't rock the boat.
On what grounds? There are businesses whose only product is targeting information for ads. If they can't get the data they need then they can't produce a product and will go out of business.
Hopefully Mozilla and Apple can start pushing some of the tracking replacement technologies since they don't have their hands tied like Google.
I don't think people abusing cookies have a standing as I see it. On what grounds, that their predatory business model is obsolete?
On the contrary, even if many web services are financed by ads, most customers of advertising just care about having the same possibilities to advertise their products. So a more healthy ad world would remain.
"Legal" advertising has eclipsed spam with its toxicity.
Not disagreeing, but ad companies attempting to sue Google out of existence would be worth watching.
IANAL, but even I can see that making changes to Chrome that impact advertising is risky even if you ignore Google's own advertising interests. So far they're trying to push things along, but they need buy-in from most of the rest of the advertising industry before they feel they can do anything too radical.
So as far as Google is concerned the elimination of third party cookies (and bounce tracking protection, browser fingerprinting, etc) is definitively tied to something that replaces it. One of those things is FLOC.