I think they're accounting for the fact that Google doesn't control all ads across the web.

My understanding is that the system literally works by buying out your own ads, as if you were an advertiser targeting specifically yourself with ads that have no content. The effect is thus that you pay what advertisers would otherwise have paid. But if some advertiser bids $100 for one ad (this actually happens!), then Google is going to show that ad.

As such, the pricing structure, while maybe overcomplicated, is perfectly fair. Theoretically, in an ad-free world, this is the price you would need to pay to consume the same content. If you feel it is too high, then what you're saying is that, for you, ads are worth the annoyance. (Or, alternately, you're saying that you'd rather pay less and get lower-quality content.)

Personally, I think $10/month is an extremely reasonable price to pay for the web content I consume, and I'd certainly rather pay it than see the ads.

EDIT: That said, as a matter of product design, I think this pricing structure sucks. They really ought to offer a flat price that removes all ads. However, I suspect that would require strong-arming all AdSense sites to agree to new terms (since it would affect how much those sites are getting paid), and as we've seen when YouTube did this in order to create YouTube Red, it tends to create a huge PR backlash.

It's not. Google doesn't control all ads on the web. It's basically "hide 90% of Google ads".