It's a free service. Free as in free beer. There are real costs in hosting an email service, they need to pay for it somehow.

If you don't want ads, just pay for a G-suite account.

Well that would certainly explain why I haven't seen these ads - I pay for G-suite.

Nonetheless, I find this to be heinous. Practically the same as Google vouching for spam emails, pushing them directly into your inbox.

There have been ads for over a decade, but they didn’t appear within the interface as if they were mail.

I am sure many agree with you and would happily use your free email service that doesn't have ads.