the problem has always been that you have to be of questionable morality to harvest this data, get data of probably low quality, and piss people off
It may not solve the "current" problem, since advertisers won't even use this if they don't feel it will help them - they already have their means. But that doesn't mean it's useless. Don't be myopic.
No one said it's useless. It's very useful, primarily to advertisers, who will definitely make use of it if it's available. And it aims to solve _exactly_ the "current problem" of advertising, couched in a language that presumes that there is surely some other use out there that we're going to presume is the primary use case once they figure out what it is. So far, their attempt to find another use case amounts to a news site that skips right to the sports section (or a site that knows that to you, news.tld really means news.tld/sports). At best (where the user is concerned) it's a solution in want of a problem. At worst, it's an attempt to obscure its primary purpose. And the morality of the purpose itself remains questionable.
Moreover, it could theoretically work for a lot more than just ads and marketing. It would basically permits third parties to be granted access to your data. So, for instance, you could grant your geolocation database to only certain mapping sites. Or your social media history only to a game site that will utilize it.
There are many applications that are appearing for this kind of information harvesting that aren't all malicious. Some of them are even exciting
Except that's not what's being proposed at all. It's a good idea that any data sharing should require explicit user approval on a party-by-party basis: history, geolocation data, anything. But they're not talking about parsing your geolocation or social connections or anything like that. Their proposal is not "sharing certain things with certain parties over the internet". That's pointlessly broad. They're talking about divining general categories of interests, Stumble-Upon-style, from your browser history -- the type of sites you'd like to see more of, and the stuff you're most likely to buy -- and sending that to designated parties. In other words, they propose giving you increased power to allow people to advertise to you. But, since they haven't fixed any other method of tracking, you don't have a corresponding increase in your power to disallow advertising. The benefits of this are 100% in the favorof the advertiser.
Um, they're proposing that you, the user, can tell sites what you want them to know. Nothing at all, or certain information for certain sites. This is an opt-in. It will be useless to we who don't want it. It will help those who aren't as hardline about ads.
If everyone else is fine enabling cookies just to get any use out of, say, target.com, then you can bet you will eventually be expected to as well. Even if you're just "window shopping" and don't need cookies for any legitimate reason. It becomes the burden of the cookie-wary to either compromise their preferences or figure out a technical solution to bypass the developer's preferences. This is the meaning of my phrase above, "you are as free as your neighbors want to be".