Manually donating to each site isn't realistic given human psychology; people simply won't do it. Something more automatic is better, even if it's not perfect. So I really like the idea.
Downsides for me:
- only works for sites with Google ads on them, not for other ad networks or for sites that want to be ad-free
- tracking presumably still happens; it would be nicer if there was some sort of protocol to automatically pay sites anonymously