Pretty sure it'll be because of the semi-shady ad networks that service torrent sites and various other filehosts. The networks themselves aren't shady, per se, but they don't have the resources of Google to adequately police all of the ads that run through their networks. As a result, they end up serving malicious ads that link to dodgy installers or even straight up 0-day browser exploits.
Absolutely, but those ads aren't usually pointing at outright malicious software, just shitty adware like download accelerators or whatever. Google's algorithms and manual approval processes have been pretty good at filtering out anything explicitly malicious, at least in my experience.
Even malware makes it into adsense , and if i remember correctly it took a few hours after reporting the ad for it to be removed. It's been a while since i ve had these reports though.
I think it's more of a game-theoretic "principal-agent-problem avoiding" solution. If system X.Y.Z is having a problem, the way to allow the most degrees of freedom in the way it gets fixed (and therefore, usually, the way to get it fixed most efficiently) is to put pressure on component X. X will put pressure on X.Y, who will in turn put pressure on X.Y.Z. But if the system can also be fixed by, say, getting X to find a new X.Y, that's good too!
An example of this: auto insurance. When you get in an accident and want money, you don't sue the other guy; you sue your own insurance company, who sues the other guy's insurance company, who in turn sues them. If, somewhere during that propagation, an alternative is found (e.g. the two insurance companies agree that it was a no-fault collision under arbitration and settle for some amount), then you end up achieving the same effect while putting less stress on the system as a whole.
The interstitial for blocked content is implemented on a per-page level. You can test this yourself by creating a test page with an iframe to http://ianfette.org.
Suppose that Chrome just tried to replace the malicious embedded content. What happens when that embedded content is styled with CSS properties to make it hidden from the user?