Junk sites are like weekly shoppers or those bulk-rate advertising supplements that you get in the mail. They may work for some advertisers, but they're limited in the types and numbers of advertisers that they draw.
The challenge for Google is how to keep sites with questionable content (or no content) that deliver satisfactory conversion for some advertisers without requiring all advertisers to take potluck. AdSense will fail to reach the larger and more lucrative mainstream advertising market unless it provides more choices and controls to advertisers.
Idealism has nothing to do with it. (See above.) Improvements to the AdSense network will be driven by advertiser demand and by competition from other networks.
BTW, it isn't hard to envision any number of competitors to Google in the contextual ad space over the next few years. Aside from Overture and smaller players like Quigo AdS**ar, we may well see the emergence of specialized networks in profitable niche markets as OEM equivalents of AdSense enter the marketplace.