Cable always had ads. It was pay channels that didn't and still don't. At least that's how it was here.
Streaming was invented as a way to one-up the cable industry, keep the price down and not have ads. No ads was how they got people away from cable in the first place.
As for as what
Solo4114 said, it's option 2. HBO added ads, netflix caved and added ads, hulu always had a package with ads, so Disney just said 'why should we lose that money?' and added an add supported tier. Yeah, if you could get what you wanted by going to a place without ads, great. I'd do that too. The problem is, they all have now and even if they don't, these companies have managed to create services that house just 'their' content so you have no option to get it anywhere else.
This is likely the argument against studios owning theaters. If Disney owns AMC (for example) and they put out Avatar II in theaters only, then they can release it to AMC only and instead of $15/ticket or whatever your local rate is, it becomes $50 across the board and you have no choice because you won't find any theater showing it at a different price because Disney owns all the theaters showing it. Same thing will happen here. Are people going to drop disney if they jack up rates to 30/month? I'm sure they will, but at some point they'll sign up for a month, binge everything they want and quit again. If you want to see Star Wars or Marvel, for example, there is no other choice.
It didn't seem this crass 20-30 years ago, but now, that's the model. Create a company, generate buzz, cash in with an IPO and now stockholders call all the shots and do so to squeeze every penny out if they can.