If Google used anything about Adsense as a negative organic signal, then content farms would quickly move to (or even create) a different ad platform or adjust their Adsense layout.
If publishers were forced to adjust their Adsense layout, they'd make less money. A LOT less money, so much so that a lot of players would give up. Significantly less for investors in Demand Media to take fright.
Regarding other types of advertising - display advertising doesn't pay well, in terms of EPM, it's a fraction of what you would get with Adsense - so switching to that only makes sense if you get millions of pageviews but your content is not targeted and does badly with Adsense - news sites are the best example.
Other ad networks - they have been many, many, attempts to set up ad networks to compete with Adwords/Adsense - but the problem most have is they don't have the same depth of advertisers. Google's strength is that pretty much everyone advertises with them on the search pages, so it's easy to persuade enough of these advertisers to advertise on content sites, to serve up relevant ads. If you have a small pool of advertisers, you really struggle to serve up relevant ads.
I once put Chitika on a page - and took it off within 24 hours. They were serving really bad spammy ads about weight loss, that had nothing to do with my content which was technical, and made the page look really rotton. I'm sure lots of other people have had the same experience.
I suppose the problem would be solved if Microsoft allowed content owners to sign up to it's ad network. At the moment though, they only have deals with large players in the USA. Publishers in Europe can't sign up and neither can smaller players.
But here we are getting into competition (or lack of it) amongst advertising platforms, which is a bit off topic.
P.S. I'm pretty sure that Demand Media is one of those large players that IS signed up to Microsoft's ad network. They use yieldmanager to serve up ads, and the point of yield manager is to rotate the ads between Adsense and Microsft ad network.
That might give you a clue as to why Microsoft is silent about Demand Media. They get to make money from traffic funnelled to EHow and the rest by Google.