Is it just that it advertises free software?
It is that it doesn't advertise proprietary software. Read the press release: the FSF feels that proprietary software is immoral and that advertising both gives aid and comfort to the enemy and taints the purity of the people who take money for it.
The FSF's quirky-but-harmless religious views aside, I'm all for more options in advertising. Candidly, though, I hope the sites hosting my OSS competitors don't switch to this network -- the ads I put on them perform pretty well.