You can have a compromise. There is a minimum number of $$$ you need to stay in business. The less ads you have in total, the more supply and demand allows you to charge. Most sites though are not at the point anyone will pay them more than someone else, so if you show less ads you won't be able to charge more for the few you show. (the super bowl famously can charge very high rates, but for the average web site you are competing with every other website and so less space isn't significant to all customers)

I strongly believe that most web sites are leaving a lot of money on the table by not having their ads in-house. It will be more work (and cost) in the short run, but a good ad salesman can find those customers who really want to target the people reading your website in ways algorithms do not. The big automakers and fast food don't care about targeting - nearly everyone is a potential customer so they can get everyone. Most care about targeting and so by selling direct you ensure that their ads never go to someone who won't buy anyway because of the algorithm.