Back when it was newish, and Hulu put a 15 or 30 second advertisement in the usual two or three minute ad breaks for shows, that was perfect. At the very least, I won't pay attention to several minutes of advertising. It's more likely I will find some way to circumvent it or just not watch at all. 15 or 30 seconds, on the other hand, is quick enough so that I may as well just keep paying attention. I can remember advertisements I saw on Hulu five years ago, but can't think of a single current TV ad.
It may be that I'm not typical, but it's a shame that model didn't work out and the ads became more valuable with their scarcity. It was win-win. I get to watch shows for free, they get to target ads at me that though fewer in number, I'll actually watch.