Interesting. Could one use this to harass an ex? Because unless these sorts of ads are flaggable, I bet that will happen, whether unintentionally ("Dear Angelina, I miss you and I know you have seen this 53 times") or intentionally ("YOU HORRIBLE DEMON BIRCH %$@#%$!!!").
There are hundreds of examples where privacy could be violated and misused. This is why (or at least the negative PR is why) Facebook has attempted to remove the ability. Also are FB ads ever not flaggable/reportable?