I run privoxy locally on OSX and I like that it runs in a separate process (AB+ with a few dozen tabs open really sucks up RAM) and blocks ads on other things too (twitter clients come to mind) when set up as a system proxy. It's not the most straightforward thing to configure, but once you figure it out it's pretty great. I've never seen it donk up my pages like some of the old proxies used to; this stuff has come a long way in the past decade.
I think you are right. However not a lot of people use privoxy compared to the many users of adblock-whatever. Also there aren't many people putting together their own squid3 build with custom list of sites to block.
Neither of these tools take that much effort to setup on a linux machine if you know what you are doing and have a rough idea of how the internet works.
Consequently, for people that cannot be bothered to invest the 10-20 minutes to get privoxy working, the less than perfect solutions offered by the adblock-whatever freebees are okay by me.
Everything you say is quite sensible. I mentioned privoxy here because obviously a large fraction of the HN audience would be comfortable setting it up.
It's worth at least knowing about because of its generality: it filters and transforms the incoming data before it gets to your browser, so it's irrelevant which browser you're using. It can run on your local machine or you can put it on a server and connect through an ssh tunnel, bypassing web filters and snooping (very good for frequent travelers). When used remotely it can compensate for slow local connections by, for example, compressing images.
