I don’t think a healthy internet inherently needs ads to survive, but it is true that the internet we currently have is primarily ad supported. (Whether or not our current internet is healthy or not and whether or not their are better alternative models are separate questions).
With that said, I agree with your broader point. Ads in general are not a privacy issue, before the internet ads were just ads, annoying, often manipulative, but otherwise pretty benign. The problem now is that the adtech companies are also the tracking companies, and advertising and tracking are intertwined and hard to disentangle online.