I understand what your saying here but this particular guy is not doing that is he?If you read the Original post please, The guy is showing ads through iframes from a site that has matching keywords/content so his site shows relative ads.
His website is showing relevant ads but he is not allowed to do that because adsense is diabled on his website. And yes! we show adsense in an external iframe even is adsense is disabled on the website
Maybe, you should ask whether it is against the TOS with adsense before continue to do it. Nowadays, it is so common to see many get their adsense account banned and lost all their earnings.
As per them we are allowed to use iFrames if we use document.parent tag to match our ads with content of main page. But we are now allowed to use it for wrong purposes such as showing ads on disabled website.
People using unacceptable tricks that are against the guidelines to increase their revenue reduce the eCPM for everyone, so it is our duty as decent publishers to report them to Google. I can't help to think that anyone defending those fraudsters are just concerned because they themselves are playing dangerously.
It is completely against TOS... somebody said iFrame is OK! which is NOT! Besides all of that anyone cheating or tricking adsense for whatever reason and however.... means that they are harming all of us! Any penny of the Advertisers spent by a trick leads those advertisers to pay less in the next campaign. Please try to think like an advertiser. If you have a conversion rate of %5 than you can place 1$ to sell a product with 20$ of advertisement budget. If because of any tricks, conversion rate drops to %1 then obviously they will start to pay 0.20$... Considering Google app. take %60 off... you will receive either 0.40$ or 0.08$... This is the difference between reporting a thief and any trick or cheat you came accross.
If you want to be paid all life by Google respect the TOS! If not make fast money and get banned! You choose!