You make great points, but you have one thing backwards.
Would it creep a female out to see an ad that apparently knows they are female?
Who knows you're femail? Google or the ad? The answer you seem to have is the ad. The real answer is Google.
It's like ads for the GAP. GAP doesn't know who a douche is. They just market to the douche segment. If they place such ads at douchy concerts, it's not because they had to survey the crowd. They just know where the big douche congregations are.
Same difference if you go on Google and search "vaginal cream". You're probably not a guy with that search.
The other way they know is informations you A) give to them or B) is found on the web. Can Rick Santorum scrub his results? No. Is this a privacy issue? For him, maybe. Problem is, if its online, it's public knowledge.
The EU would like to change that. Force companies to scrub the web. And frankly, that's just horseshit. That's modern day book burning and heretic scourging.