It's commercialization in general that distorts things, and you're probably right that SEO without advertising might actually have been worse? But then again, the online advertising market is a whole evolved thing that maybe...doesn't need to be...as big as it is? E.g. I don't see structurally how the economy requires spending hundreds of billions of dollars on advertising to function.

Yes, I agree that (on and off-line) advertising does seem to be unnecessarily expensive (across the economy), but valuable 'advertising placements' are scarce, and I'm not sure how else they could be allocated.