In general, I believe it's based on the belief that children in partiular don't yet have the necessary mental tools to be able to properly analyze content -- basically, that they're influenced by media to a much higher degree than adults.

> Basically ads equivalent OTA television or magazine ads should be allowed

I would guess that proponents of this approach also feel that the contents of TV/magazine ads should be strictly controlled (and probably they are -- I'm not sure what the exact regulations around these are, but I am sure it's much harder to publish a blatantly misleading magazine or TV ad, without consequences to the advertiser or the network/magazine, than it is to publish one online).