Yes, the worst part of Adaware is the "phoning home" aspect, and in particular the diffuculty of distinguishing sending back marketing information from sending back keystrokes and information that can be used maliciously. The methods Adaware uses for this is very difficult to secure - unless you do the sensible thing and block it all.
However, my experience of how adaware's "simply displaying ads" process works is that it is intrusive, annoying and another easy way for people to click on links they shouldn't. The common example being a pop up saying Adaware was detected, and click on a link to get a fix (which is itself more adaware if not worse).
Advertising is an annoyance that I can put up with in the appropriate places (such as margins of web pages), but popping it up without prompting and redirecting my home page is not appropriate. It is akin to an advertiser waking me in my bed and thrusting an advert in my face.
The only way to manage adaware is to remove and/or block it all. Adaware is the opposite of money - even when its good its bad.
