Anytime the editorial content of blogs is tainted with cash, it de-legitimizes the medium. Even the promise of links is promising traffic which translates into potential ad revenue for the blog. Getting bloggers to create their own ads seems to take them away from what they are (probably) doing best: writing content for their readers. Collectively, readers are smart. They can smell a rat a mile away. Once they realize the content of the blog they are reading is influenced by money, they will move on.
Just to pile on, here are a few other things bloggers shouldn't do:
Reproduce editorial content without linking to the author.
Reproduce more than three paragraphs of content.
Reproduce any photos or art without permission.
Steal bandwidth by using an existing URL to post hijacked art.
Fail to hat-tip to a blog that pointed out a story.
Delete or substantially alter a post, unless you're deleting the whole blog.
Cross post without linking to the crosspost.
Astroturf. Seriously, nothing pisses me off like astroturfing.
When I started blogging, I probably violated all these rules. (Except the last one, which I consider almost unforgivable.) You have to give neophytes some leeway. And as more people and more brands enter into a Web 2.0 world, the code of ethics which has bound good bloggers is bound to be stretched a bit. Hopefully the medium won't get so corrupted it becomes worthless.
UPDATE: Here's another thought. Know the difference between anonymous blogging and pseudonymous blogging. It is important.