S3 is Amazon's "disk in the cloud" offering. Many people store static assets on S3 and use it as a cheap CDN. There might be some ads there, but there's more likely to be someone storing the images on their blog there, too. It would be like blocking everything under google.com because you don't like seeing adsense content network ads.

I probably should have mentioned this in my original response, but fscking around with the hosts file is generally a bad idea. If you want to block ads, run the adblock plugin.

Sean