Its mixing confidential info. For example, you know I'm connected from a location, but you do not know my precise location. I connected from a tower that is from Odido, but I am not paying Odido for a subscription.
Right, IP-to-geo is approximate and gets a lot of cases wrong (yours among them). Most ad networks use it as a region/DMA hint, and not precise positioning. The point of including it isn't precision. It's that any location is more than nothing, and the visitor never opted in.
