It isn't a problem with ads. The problem is the misalignment between the business model and the product, and also the misalignment between the business model and the main users of the system.
Another better system? Look at the early days of Google, they never would have gotten off the ground without very generous support from academia and specifically their university. What if it had been kept a university-based product?
And yes, it could have reached its current search capacity and still remained a Stanford-based initiative. Stanford has the resources. We might not have gotten any of the other google products out of that, but Google seems to cancel them all anyway, so I don't see a huge difference.
You can get a better estimate from Google's CapEx in it's financials.
Stanford's endowment is ~30 billion. Google's CapEx is ~20 billion a year and has been for the last 4 years or so. You can weasel about exactly how much of that is attributable to search as opposed to other initiatives, (but even if you look back a decade to when Google was mostly search, it was running a CapEx of ~5 billion/year). So even making pretty favorable estimations, you'd be looking at Stanford being bankrupt around now.
For some products it's obviously a fine system. A majority of people will never pay for a search engine, or social media, so ads are a good way to pay for those services.
Where I think companies, such as Google or Meta, goes off the deep end, is the amount of money you can realistically extract from advertising, without compromising your product. Both Google and Meta (much to my surprise) are extremely wealthy, but at the cost of what I'd call decency or morale. Both could have fine products and successful business, but somewhat smaller, and be financed by ads.
If you look back that the original Google ads, where they not successful? They certainly seemed to pay the bills back them. My point is: If your company is financed by advertising, you need to accept that there's a limit to your potential growth, if you still want to be view in an overall positive light.
Yes, there is a limit on how many ads they can show to you without deteriorating user experience but sometimes they just don't care. They think like this: Q2 results were weaker than expected, let's show more ads to users in order to boost our Q3 results.
Another better system? Look at the early days of Google, they never would have gotten off the ground without very generous support from academia and specifically their university. What if it had been kept a university-based product?
And yes, it could have reached its current search capacity and still remained a Stanford-based initiative. Stanford has the resources. We might not have gotten any of the other google products out of that, but Google seems to cancel them all anyway, so I don't see a huge difference.