To your suggestions... 1- who is going to phone that number? They have millions if not billions of advertisers. Also, don't they want new businesses (with likely newly registered domains) to come and start advertising and paying money?
2. see above but "who is going to review the paperwork" also, easy to create fraudulent documents
3. Most small restaurants probably spend $100 on ads, likely aren't going to advertise if they need to put down a bunch of cash.
To Google, this just looks like a restaurant coming to advertise. So what if it has the same name. Two Dominos pizzas in my town could both set up ads and they should accept them.
I totally get why this is bad, but I think it would be very difficult for Google to control in a way that the OP twitter user is suggesting. This isn't an old school ad business where you meet with clients. Google is a trillion dollar company because you can run ads in 1 minute of work.