I don't think they're not taking it seriously.
I also don't believe (and again, don't work there, just a huge fan, so maybe this is wrong) I'm not sure that the revenue was the reason for shipping this feature. It's best thought of as an accessibility feature, for folks who do not know what a "DNS record" is and have never hosted a domain. Without this, more technical users get something special that non-technical users do not: a nicer username. The money is just a side effect of the fact that purchasing a domain name already requires money, and so a partnership with a revenue split just makes sense.
> Either way I think it's insane to prematurely rule out advertising.
I hear you in an abstract "that's the way you make money in this space" sense, but I also think it's a smart reaction to the public sentiment around this stuff. People do not like advertising. It is a differentiator. We'll see if it works out for them or not.