Earlier this week, I reported a bad ad (scareware) via Twitter, and the advertiser was subsequently banned. Today, I found another bad ad; searching for “e-sword” yields an ad to buy e-Sword on eBay; last I knew, the e-Sword license agreement forbids selling copies, so this ad is clearly scamming. There have also, in the past, been Amazon-based ads that probably shouldn't pass Safe Search.
It seems that it might be useful to provide a way for willing users to easily flag bad ads - maybe nothing enabled by default (so people aren't overly tempted to use it inappropriately & increase flag volume), but something that can be turned on or added on (e.g. Greasemonkey script). I'd happily flag bad/sketchy ads or sponsored links, even w/ a 1-sentence message as to why, if that would help police advertising to keep it high-quality and useful to users.