And this issue is not the same as blending. Blending is not about drawing undue attention to ads; to whit, it's about making the ads stand out as little as possible.
You are absolutely correct. [sarcasm@Google]Blending is obfuscating the ads so they do not stand out. Or the ad pretends it is part of the site. Or that it appears as not an advertisement and luring the user into clicking...[/sarcasm@Google]
Sorry, timster. I am flustered with Google. Although technically indeed they are different, but conceptually they are both methodologies to get a visitor to click. One by drawing attention to the advertisement, and the other is by hiding it amongst real content.
The unhappy people get mad because their attempts to skirt the edge of adsense policy get foiled. It's the same people who complain, each time one of their fave "avenues" gets blocked.
Generalizations tend to be almost always incorrect. ;) As such, I am very unhappy and mad, yet I made no attempt to "skirt the edge". I don't even think I have images on my sites besides my logos. I guess I am entitled to some things :).