This AD makes it seem like they are a government agency, that you are under investigation, and your ISP is also in on it. It also implies you have commited illegal activity, and of course encourages you to buy software to get rid of evidence.
Now, my big thing here, is ignorant people. Newbies to the internet in general. Can you imagine some guy just getting on the internet, checking out an adult content site they mentioned at work, and seeing this?
Damn right he would panic and buy the software. I can think of many similar scenarios.
So is this illegal or not? And if so, why? I find this very wrong.
BTW, I was visiting a MAME arcade building site and that came up, so I think it just guesses people are doing things wrong. But then again, aren't the majority of ppl surfing the net, going to or have gone to sites that would not like to be made public?