But non-targeted advertising, while less valuable than targeted, still has a non-zero value. Targeting is just a means of maximizing the profits that they will be getting from their advertisers.
Not really. Targeting is harder and more expensive to do well than non-targeting. Advertisers really don't care whether they're buying targeted or untargeted advertising, they just want a good return for their advertising spend... it's the same to them whether their dollar of ad spend that generates two dollars of revenue is doing it by displaying a dozen carefully targeted ads or ten thousand untargeted ads.
All of this means that advertisers and on-line ad services are just as happy to use and deliver, respectively, untargeted ads. So why are targeted ads so popular? Because users prefer them. Specifically, users prefer fewer ads and less visually-intrusive ads. This means site owners prefer fewer ads and less visually-intrusive ads. This means users and site owners prefer targeted ads over non-targeted ads, because achieving the same ad effectiveness without targeting means lots more and bigger ads.
Remember what on-line advertising looked like pre-Google? Blinking banner ads everywhere? For that matter, take a look at the typical "36 weird ways to X" web site, with it's massive number of ads per page and content spread out over 40 pages. That's what untargeted online advertising looks like. There are exceptions, because some sites are so narrowly targeted that advertising on that particular site is all the relevant advertisers need to do. But that only works with narrowly-focused products on narrowly-focused sites. In all other situations, untargeted means massive ad volume.
I don't want to see the web go that direction. If we want an alternative to targeted advertising, it should be paid services. Untargeted advertising sucks for users.