There was a certain terrifying plausibility to this story, as others have said. BUT, I think it was missing one thing: A counter-product. Advertising has this weird life cycle of adaptation and countermeasures, and counter-countermeasures, always escalating to gain the consumer dollar. Usually the countermeasures are created by people who dislike that particular type of advertising, and eventually, that countermeasure either gets monetized itself, or rendered useless by further advances. The advancement of online advertising has seen this cycle go through many more iterations, simply because mass advertising is so cheap to make on the internet, relatively speaking. First there were spam email, then came side bars, then pop ups, pop unders, pop overs, intro videos, outro videos, pay walls, ad walls, etc. etc. And all have been or soon will be avoided by various other plugins and gadgets and doodads.
Personally, I run my adblockers open for most sites that I visit often and enjoy. I know that many web sites rely on ad revenue, and unless they are truly atrocious, I let the ads do their thing on the periphery. If the article, web comic, blog post, or whatever I am looking at is especially pleasing to me, I'll even click on an ad to reward them further.
My big gripe with tailored advertising is I wish I could tell places that I'm shopping for a gift, not for myself. When I looked at basketballs on Amazon for my nephew, I was bombarded by basketball and basketball-related ads for weeks.