It's easy to get drawn into doing this kind of intrusive advertising when you have a captive audience on a WiFi network. It's an idea I've discussed or been involved in "testing" a number of times. (background: I've been building/operating wireless/WiFi/Hotspot networks since 2001)
The reality is AT&T probably has no idea how bad this is, and likely would not care. Somewhere, someone sees the potential dollars on the upside and that's the only factor that matters.
There are better ways to monetize free WiFi today. Advertising is a piece of that puzzle, but there are others too.
(replying to myself is probably bad form, but I had another thought to note here)
Most likely, the WiFi provided by carriers like AT&T is meant for offloading. The phones will do EAP-SIM or some other authentication the customer has no idea of. That will get the voice and SMS traffic passing via WiFi and associated backhaul to the Mobile Core, instead of the mobile network.
Assuming that scenario, where WiFi is really a low-cost extension of the mobile network, the carrier has very little incentive to do the "right thing" when it comes to injecting ads and/or content filtering. They are already improving the services their customers pay for. Offsetting that (relatively low cost) with some "bad form" advertising probably won't get a second thought.
The reality is AT&T probably has no idea how bad this is, and likely would not care. Somewhere, someone sees the potential dollars on the upside and that's the only factor that matters.
There are better ways to monetize free WiFi today. Advertising is a piece of that puzzle, but there are others too.