Better than nothing? Maybe? Ideal? No.
If we take Google at its word (not always a great idea), this seems like a step in the right direction - towards less targeted advertising and less collection of PII.
Ideally, though, the only form of targeting that should be allowed is broad locations (like city or county) so that local businesses can avoid advertising to someone across the country from them. Unfortunately this will require government intervention through laws or regulations and I don't see that happening.