"However, a web where the only content is paid content – where literally everything you see or read is itself an advertisement – isn't an outcome they seem to want to consider."
What are you on about - we're already there.
-News sites run puff pieces all the time disguised as news.
- Movie sites are just there to get people to watch movies. Even when they bag one they always suggest another readers should watch.
- Review sites write stuff which make people feel like what they have is inferior and they need to buy the latest gadget which is so much more shiny than the one you were perfectly happy with 5 minutes ago. Again where they do a negative review there's always an alternative they suggest with the obligatory affiliate link.
I'm a photographer and 90% of photography sites operate simply to generate hype and drive sales via affiliate links. Often these sites are owned (or part owned) by the retailers. Most of the rest are just "don't listen to all those other sites telling you to buy new gear, just improve your technique. Oh and by the way here's my new workshop/video series which you can buy".
Content which isn't advertorial these days is rare. At the end of the day most of what you read on the net and in papers/mags is designed to make you buy. That's how sites stay alive. Whether it is entirely conscious or not writers have just packaged their sales suggestions into content people voluntarily choose to consume.