One of my friend just passed me the link of a post @ mashable - that says it all - http://mashable.com/2008/11/27/google-ads-terrorism/ What a mess!
Google aren't 'doing' it - it's an impersonal algorithm, it's just matching words without any ability to understand their meaning. I would have thought a news website was running a constant risk with having keyword-matched ads of such instances - it's the site's responsibility.
Nice Notice.. But the ads are shown automatically when the content is spidered by adsense bot so cant blame them.. BUT Its sad that such words are not monitored...
Yes -its sometime pretty bad - I mean the automated script that runs their ads. But I agree with xc06 - they should apply some filters in the system so that these kinds of things do not happen again.
We had to remove the Google ads from some of our kid friendly sites, because Extremely Adult ads were filtering in, which they say they don't allow ..... some of the words were really really bad...especially for kid sites. They really need to filter content they produce.