Very cool. Except... They forgot to show the "Ukulele $350" ad that pops up when he looks at the book. Also, "Monsieur Gayno Boxed Set - $24.95", "Feet hurt? Try walking shoes from Reebok!" and "John Smith for Mayor! I'll make the trains run on time."
But actually your scenario sounds plausible if Google was the most ignorant, narrow minded, child-like version of an ad network. If they have any smart people at all working at Google, I think that they would have a much wider, longer-term vision in which they can generate value from more than just bombarding you with ads in the most direct, obvious way possible. If they feel at all compelled to stay relevant and profitable for the longest amount of time possible, then they are working on that right now.