There is absolutely nothing new or strange here. Location-based services and mobile advertising already can and do collect this information on the iPhone, and have done so for a long time. Apple with iAd is now doing what others do, and is including location information to enable locally-relevant advertising, which many people want. If you're not one of them, you can easily turn off location sharing and opt out of targeted advertising.
I always have a laugh when huge corporations justify the location targeted adds as... relevant to you
No they are really not relevant to people, they a relevant to other corporations that want to sell you their products and make money off you.