Google has pulled a number of popular ad-blocking apps from Google Play, citing violations of the terms of service agreement.
Adaway? Gone. Adblock Plus? Gone. Pretty much all of the apps that promised ad blocking features have been pulled from the Google Play store. Google's obviously in the advertising business itself, but specifically it's within its rights to pull the apps based on the TOS agreement for the Play Store, which prohibits
"Any app that interferes with, disrupts, damages, or accesses in an unauthorized manner the devices, servers, networks, or other properties or services of any third party including, but not limited to, Android users, Google or any mobile network operator."
It's an interesting balancing point. It would be naive to assume that people don't use ad-blockers. At the same time, many apps (and, fairly obviously, sites such as Gizmodo) rely on advertising for revenue and ongoing operations, so in that sense I'd say it's fair enough.
Equally, though, Android is a somewhat open platform, which means the offending apps can in theory pop up on other, unregulated stores. Except those stores can be a real can of worms when it comes to Android malware, and a fake ad-blocker would seem like a very obvious and tempting target for malware writers.
Google removes Ad-blockers from the Play Store [Android Community]