Pl suggest.
Thanks in advance...
To answer the question .... I have no idea. It may just be that the site falls foul of the adwords "quality score", and even if it were indexed in google its quality score would be low, driving up the min cpc.
I would suspect that currently it makes no difference if the site is indexed or not, or banned or not. People use adwords specifically to advertise new sites that arent indexed. But with the requirements for the quality score becoming more seo-like, perhaps it will be important in the future.
But it IS true that if most of your inbound links come from site-wide links and use the exact same anchor text, your page (not site) can be penalised for that phrase you used in the anchor text, I've seen it myself. Now in theory someone else could do this TO you. So it is possible for inbound links to hurt you. I do believe it used to be only the links you could control, ie outbound links, that could damage you.
Not sure if inbounds they can get you completely banned though, Im struggling to work out how.