My first thought is: This is a great way to get their attention. If you've been surreptitiously flying under the radar up until now, I think that stage is long gone. On the flip side, maybe instead of shutting you down, they should acquire you and then shut you down. That's a win-win, right?
Why would they acquire him when they could shut him down and replicate the service? It's not like they have much of a reputation to maintain. He doesn't have extremely significant traction (otherwise they would have done something by now) and AFAICT he doesn't hold any patents. To clarify: I don't mean to disparage him, but acquisitions have to bring some sort of value to the acquirer.
These aren't ads. These are "person abc favorited your tweet" notifications that the mobile twitter client pops up, and twitter emails you. If that gets overrun by spam (a) people will turn them off and (b) favorites will be useless as a mechanism for displaying "top tweets" like they do.