I hear you sandyeggo. If you really want to pursue it you need to give them all the evidence - make it easy for them to understand what the problem is and how the advertiser is abusing the system. I hate to say it, but it may not be worth pursuing, unless you're fairly sure no other competitor will crop up and do the same thing. There are so many ways around the double-serving policy, which I agree is unfair. Sometimes I think an advertisers union could help push for response on widespread concerns - many complaints in a short space of time are more likely to get a response.
That said, if you present the evidence, and don't see the advertiser being taken down, that implies you too could employ this "technique." I'd be wary of doing it for fear of future quality score slapping though.