If you were an advertiser wouldn't you like people to report to google when ads where displayed in an inappropriate site or would you rather keep wasting money until Google finds those violating TOS?
It's just part of their TOS, if a site is violating the TOS and still has the ads...as long as the advertiser is getting hits from that site they shouldn't care whether that site is violating googles TOS...if they are violating the terms...google "says" the advertiser will get their money back although I think it's crap and not true...just worry about your own site and spend time making content to get more money through adsense instead of going around searching for sites to report...no one likes snitches.
What if the site has misleading pictures of naked people, or ads blended in to trick users into clicking, or what if the site asks the users to click on ads? There are tons of reasons why a site violating TOS affects advertisers.
I'm not getting all technical dude...of course theres a point where you have to draw the line...but i'm saying i don't understand why people go around searching for sites to report when they aren't even paying for advertisements that are on that website? how does that benefit them, it doesn't? I think the only way you should report a site is if you're an advertiser with ad-words and say you're browsing the web and come across a site like you mentioned and you see you're ads on that site...then u should report the site.