Actually I've seen this a long time ago, I remember Jet Moto had a whole bunch of billboards and such along the racetracks. I don't actually think it's that bad of an idea as long as the money is put to good use, or better yet the game is made cheaper because of it.
Actually...that just gave me an idea: what if rather than a monthly fee in MMORPGs, they just have advertisements and such in-game to pay to keep the game running? I don't know about you, but I would rather have to walk by a few advertisements in-game than pay a recurring fee! Unfortunatly, it seems Everquest 2 now has income from BOTH sources...so much for passing the savings onto the customer