Earlier quoted context omitted.
What you're describing sounds similar to Basic Attention Token [1] which is used by Brave browser [2]. [1] https://basicattentiontoken.org/ [2] https://brave.com/
If the intro video is to be believed, that seems like a terrible idea in so many ways. The video explains it like "you view ads, your browser privately tracks whether you watched them, and awards the website and the user with BATs". So while we now have middlemen in the form of ad networks, with BATs we have an additional one to convert that currency into your local currency. Additionally, the ad network will have to…
The part of their proposal I would suggest fixating on is the fact that if you make deposits into your Brave wallet, you get to block ads (right now, ads are blocked regardless), and publishers will be able to turn off their anti-ad-blocking measures if they see you're using Brave, since you'll be providing them with revenue. The hope is that in the future, paywall sites like WSJ may allow you to bypass their paywall if they can verify that you're using Brave.
There is a lot of uncertainty right now about how the whole ad system will work, because the team is focusing on making the browser robust enough so it can compete with FF and Chrome. But in the meantime, they're also getting useful information about what real users and publishers are actually keen on.
I suspect that the more obvious flaws, like the ones you pointed out, will be accounted for once the system is fleshed out. They have not shied away from moving away from their original proposal to more practical approaches.
Regarding the earned BAT by watching ads, I believe that it cannot actually be withdrawn, only used to pay publishers, but again, things may change. And I agree that the blockchain may superflous here, but using it has allowed them to get the funding to get things off the ground and attract users, which counts as a valid use in my book.