Dave Winer argues that blogs undergo a metamorphosis when they take on ads.
A blog without ads is itself an ad, interesting to a small number of people. Blogs with ads, like their print counterparts, strive to be as broad as possible, to reach as many people, and in doing so, lose their value as an ad for the author.
I would argue the opposite. For most successful publications, success comes from being targeted, not broad. They focus on a slice of the market that will appeal to advertisers. Take Forbes. They have an extremely wealthy readership, and advertisers know it. Forbes could no doubt raise its circulation with subscription promotions, but that would raise production costs and dilute the demographic. Blogs don't have the production concerns, but still, advertisers are looking at blogs to reach tiny niche audiences, not broad ones.