The core of the outrage about Privdog is that it's created by the founder of Comodo, and distributed with Comodo products, and therefore Comodo doesn't really seem like a company you should trust, but you don't have a choice, because they're a trusted root CA.
The question is, do you trust Comodo's Privdog ad-networks more or less than all the others out there? If you are already trusting Comodo as a CA, wouldn't you think that Privdog's ad networks have been through some sort of approval process by Comodo and therefore, more trustworthy somehow? Thus, wouldn't it be better if those were the only ads you saw? That seems to be their sales pitch.
The implementation lacking any cert verification is a total fail (it might not be intentional at all), and I personally trust http://localhost:8080/blocked.gif more than any ad network... but I can see the reasoning behind the product.
I'd argue that this is also stealing from the content creators or other people/companies that added actual value (e.g. group running a forum that pays for hosting with ads).
