Advertising has been effectively done without tracking for decades. The trick is to do filtering at the content level, rather than at the consumer level. Odds are if you don't care about cosmetics, you won't watch videos about cosmetics or visit websites talking about cosmetics. Co-locating advertisements with relevant content performs this filtering in an effective manner without requiring users to be tracked.

Perhaps tracking users is more effective, perhaps it is not. Regardless, boundaries need to be set to enforce ethical behaviour if the unethical behavior is more profitable. If that means certain companies or business models won't survive: so be it. There is always a trade-off to be made between ethics and business. After all, the exact same arguments could be made against outlawing child labor or any of the past atrocities businesses committed in the name of profit. Businesses that cannot survive ethically will die to make room for businesses that can.