Before Google introduced their text-link ads, people used image or flash banner for their ads. We could see many nice web ads, but soon after the web page were getting crowded by banner-ads, it was not nice anymore. The bigger website traffic, the merrier banner ads they had. Sometimes I think these ads were really annoying, esspecialy when one web page has two or more animated banner. Animated banner was designed to attract the viewers eyes to see the banner, but if the animated banners were too many, they gave the viewers a headache.
The same happened with text-link ads. As people put too many text-link ads in their web page, they are annoying too. We can see many blogs, forums, portals, and other type of web sites either with big or small traffic, fill their web pages with text-link ads to pursue bigger income. It is okay to pursue bigger income, but not this way. I think it is reducing the ads effectiveness for the advertiser.

Google Adsense policy only allowed as many as three places for their content ads. But how about if the site owner also put their own ads, and ads from let say Adbrite, and others. So this policy is not working. But it will be very hard to control thousands even millions page, esspecially when many of them were spam-sites. So this depends to the site-owners themselves. If they want their vieweres to be comfortable when they are viewing their sites, they need to control they ads.