Flawed reasonning
"I think there will be a nice equilibrium. If people get too aggressive with ads, then ad blockers will become more popular and companies will get less aggressive with ads. The market will sort itself."
No, because it is enough that 1 (one) twat keeps overloading his website with flashy animated gifs, javascript overlay ads and similar obnoxiousnesses to keep the adblockers in; even if 99.999% of the websites around turn their advertising down from the current SpinalTap-ish eleven. Unless people realize that they can block gif animation (or images entirely), JS and other annoyances by other means; but will the average punter waste time configuring his own filtering proxy when he can just click on the big shiny "install plugin" button? Especially when the only "benefit" would be to see friggin' *ads*? Phat chance.