Competitive markets reach equilibrium. With or without tracking it’s going to barely cover costs because otherwise more people enter the market due to minimal barriers to entry.

Sometimes equilibrium is 0.

We had add supported websites well before any adverting targeting so that seems like a non sequitur.

It think that means that advertising is not going to save content, and people will have to think of alternative revenue streams, because revenue from advertising is only going to go down.

Advertising without tracking would arguably cost less. Even if it makes less, it's not clear that the margin would be worse or non-viable.