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I think that there are several big issues with ad based ebooks.
First, you have the basic problem that in general, the book industry, like the music industry, is oriented towards best salers. So, the issue how would you split the ad review up between someone like Ms Rowling and your average mid list author? For that to work, publishers would have to retain the rights to works and have all the ad money go to the publishers. It seems to me that in the music industry, more and more artists are going indie rather than with record labels. I expect that the book industry will go in a similar direction.
Second, most authors seem to have trouble producing more than two or three books per year. Since in general, books tend to do most of their sales within a couple of months of being published, that just doesn't leave enough time for ads to be effective. You would almost need to go back to the magazine days to make ads work. I can see where it might work for a single author such as your self to have ads on his own web site, with content being your works, blogs, ect.. but I just don't see it working over all.
Last, I think that books are a lot like music, in that people want specific artists and titles rather than generic items. With TV, people tend to watch specific shows rather than specific actors. Most shows that last more than a few seasons tend to have a fair amount of turn over when it comes to actors. The product that advertisers are paying for is the show, not the specific actor. Books just don't have the continuity that advertisers are looking for.
As far as DRM goes, Apple is happy to sale music without DRM. The problem is most of the record companies won't let them. What is interesting is that several of those same companies are allowing Amazon to sale the same music without DRM via the new Amazon music store. While we don't have a lot of data to go on yet, I think that it's interesting that a large number of people perfer to buy from iTunes rather Amazon. I think this shows that as long as the DRM is not burdensome, and there is a method for getting around the DRM if you really want to (i.e. burn the music to cd, then rip it back from the cd as mp3), then DRM isn't a big deal to most people. I also suspect that within the next couple of years, DRM will be a thing of the past in music. After allowing Amazon to sale DRM free mp3's, the music industry will be very hard pressed to justify forcing Apple to continue to use DRM.
More than anything, I think that you are trying to come up with a solution for a problem that might not exist. I suspect that people are, for the most part, quite willing to purchase e-books and will continue to be, even if it isn't protected with DRM. People have been able to rip CD's for almost 20 years now, yet music scene is as vibrant as ever. I just haven't seen any evidence that suggests that the books will be any different as it moves into an electronic media.
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