I suspect it's just expensive to do a good job of it.

Amazon used to be better at targeted advertising than it is now. I used to browse for a few things on Amazon, then go do something else, content with the knowledge that they'll do the hard work of figuring out what is actually a good recommendation for it. For a few years, this strategy helped me buy tools, light fixtures, and other things I used around the farm.

I'm not sure when it stopped, but it definitely did.

Ultimately, it's probably just a lot more compute than it's worth. They can probably spend $1 in compute to drive $10 in sales with dumb ads or they can spend $2 to drive $15 with smart ads. It's a diminishing returns thing and they drew the line such that I get dumb ads. Maybe folks that buy more, higher priced items get better ads.