First of all, I would like to know why it is the business of Congress to meddle in how a particular business is run in the absence of any major public outrage (I don't believe I saw anyone picketing the AT&T store or any reports of picketing at the 1 Infinite Loop) or a particular odious judicial ruling. It's all great and wonderful that they are "concerned" about our privacy, but just what makes you believe that this hasn't been happening for ages already? Besides, it only makes good business sense to build a system that targets the advertising to the individual likely to view it.
Would it make much sense for the viewers in southern Georgia to see television commercials for a small hardware store chain in Montana?
Targeting users based on demographic information is a process that has been undergoing refinement for decades. The only difference now is that we, the consumers, are making it much easier to refine the process. Consider the Pandora Radio system. They have this musical genome system that gives you music similar to music you have already chosen. As you skip or like new songs in the list, the radio station gets more an more specific as to what to want to hear, until at some point you will no longer have to hit skip. Now you don't honestly think that they aren't using the wealth of information you are providing them to manage the ads you se or hear do you?
Let's consider what kind of information that you are providing them, simply by listening to your custom radio station. They can take the IP range and do a series of simple searches to determine with decent accuracy your geographic location. If your IP is in the range of a block owned by a university, government, or corporation they can then correlate your location with a good guess as to an industry that, at the very least, the computer is being used from. If they choose to look at the time range and frequency of your logins from that IP they can likely determine if you are at work (especially if you login from the same IP for the same date/time frames).
So given that information it wouldn't be too large a stretch of the imagination to devise the following scenario:
You come into work and login, then fire up Pandora. You proceed to slog along at whatever widget it is that you are currently tasked with. All the while Pandora is innocently playing music interspersed with ads. As the time gets closer on to noon in your timezone, the category of ads shown begins to change so that you are getting a larger number of food related adverts. Not surprisingly, you find that "hey the Chinese place down the street is having a lunch special today that sounds tasty. It's been a while since I ate Chinese, think I'll go there instead of eating the PB&J I brought from home."
Now, you also happened to have Pandora on your iOS4 equipped device and as you wander into the Chinese restaurant for lunch Pandora registers your location, correlates it with the ads that your desktop account had received that day so far and determines that the Chinese restaurant ad actually worked. They then send this data to the restaurant owner (or ad agency, depending) and consequently that restaurant may have specials at lunch more often since they know that it works. They will also advertise more on Pandora, because they also know that works. It is even possible that they might install WiFi in their restaurant since a large number of customers appear form the demographic information to be employees or students of the local university, and free WiFi is quite popular in that particular demographic market.
So you see, matt_s, the collection of the iAD data is not Big Brother-ish at all (and that analogy is a little flawed since Big Brother was actually the governmental dictator, so taking your fight to the government for advocacy would seem a little at odds here). This collection of data is in fact helpful, since without that data Pandora wouldn't have sent you that ad, you wouldn't have gotten a deal on Chinese lunch, and the advertiser would have no way of knowing if their money is being spent wisely. Wisely spent advertising dollars keeps prices reasonable, so you were in fact helping the whole community out with this small act of targeted data collection participation.
Now, whether or not "opt-in" should be the law of the land is debateable, since people are, by and large, lazy. These same lazy people are the ones that click on every attachment they get in e-mail, they write their passwords on post-it notes under their keyboards and mouse pads, fail to vote because it's "too inconvenient", and they still leave keys to the house under the doormat. I seriously doubt that these people would bother to opt-in. Now, what's the harm in that you may ask? The harm is that without this precious demographic information advertisers wouldn't be able to reasonably connect with everyone that wanted to eat Chinese and everyone's lunch would end up tasting like Tasty Wheat
And really, would you like to eat Tasty Wheat three meals a day? I mean it may have all the proteins and amino acids you need but I bet it tastes as bad as it looks.