I wouldn't want to be a snitch either.... but if I was an advertiser and I saw MY ad on that site, I'd be emailing google right away.... not because I am a snitch, but because I don't want them wasting MY money.
You seem to miss a crucial point. More fraud= less advertisers= less money for AdSense publishers= small CPC I don't want to share my AdSense earnings with cheaters, do you? Honest AdSense publishers work hard.
If you are adwords publisher and your ads are publishing on that sites means just report it google, if not means just leave this matter. Google will handle this issue.
Ah, also known as the "if it doesn't DIRECTLY affect me, who cares what wrong stuff is going on" Well, here's some news...it may not be your ad DIRECTLY, but it still adds up to affect you in the big picture.