"These advertisers know that the ads have low ROI because things are measureable online. How (in)effective would traditional advertisements prove to be, if they were as measurable as their online counterparts? How (in)effective would traditional advertisements prove to be, if they didn't interject themselves into the medium in such grotesque, user-experience destroying ways?"
1. There are lots of digital ad tools that have great ROI. No one clicks on ads....until that one time they do. Critics of digital advertising like to hone in on anecdotal examples of online ads failing to support their points. This blog post is a great example of that.
2. Your second point is why Madison Avenue was so horrified by Google when they started selling ads. Tracking the performance of each individual ad was so scary they couldn't fathom it. Online ads are no worse than offline ads, we're just able to measure online ads in ways that we can't with offline.
Secondly, it depends what you mean by traditional ads. I loath television and spend far more time on the internet (and don't use adblock) and yet interstitial ads on the tv and radio (and on the net, eg youtube) are far more present in my mind than anything I've seen on the net.
In fact, apart from those silly bottom feeding ads about how some single mom found out some weird old tip and various medical professionals dislike her for it (because they're out to get you? I don't get those ads..) I can't recall a single web ad. I can tell you about Pizza Hut's cheap pizza Tuesdays though.
As for non interstitial ads, like print ads in newspapers, yeah, I imagine they're about as useful as internet ads.
Shops that over-promise then fail to maintain reasonable profit margins don't survive. At the same time, there's pressure on clients to work with established players, since a campaign gone bad is even harder to defend when it turns out the the marketing budget was blown on inexpedienced and / or desperate people who were willing to seriously undercut competitors just to land the account.