Earlier quoted context omitted.
I'm not the OP, but I do work for Knife Depot. Google did not ask us to stop advertising for one category of product. They asked us to remove those products from our site, and if we didn't, we could not advertise for ANYTHING via AdWords, including kitchen knives, cutting boards, pocket knives, etc.
Wow. Thanks for the clarification -- I'm sorry I misunderstood. If this is true, it's completely crazy. How does Google think they can tell people what products to sell on their own shops?? Then I would completely agree with what the OP did, of course. In fact, there really was no other way.
They don't. They tell you that if you want to advertise with them then you can't sell that stuff. Big difference.
The problem is that Google is heading into monopoly territory - the same as MS back in the 90s, same as all the old telecomms companies, etc. At some point in the near future they'll be hit with anti-monopoly legislation, not sure whether it'll be the EU or US that does it first, but I don't think it's far off.