Apple's content blocker extensions, released last year, let third party apps set up rules to block ads, web fonts, comments, and other content in Safari and the also-new Safari View Controller, used in apps like Tweetbot to show web pages.
Content blockers don't, however, work in Apple's own News app. So, if a publisher doesn't serve Apple News Format, or provide a full RSS feed for Apple News to render, Apple News has to go out and get the original web page... ads and all. That's has led some to ask if there's a massive massive conspiracy at play designed to protect the ads of publishers enrolled in Apple's News program. The truth, of course, is far simpler and more mundane.
- iOS content blockers only work in Safari and Safari View Controller
- News.app isn't Safari and doesn't use Safari View Controller.
Safari View Controller offers a lot of performance and power, but it's tightly locked down for security reasons. That means, if you want a more flexible, custom way to show a web page, you have to use one of the earlier frameworks, like WKWebView. News wants to customize its web view to look like the app — check out the buttons at the bottom — so it's using WKWebView.
That means no content blockers, and no other extensions whose activation rules, like content blockers, only show up for Safari or Safari View Controller. (My password manager, for example, doesn't show up.)
In order to get content blockers — and other apple.active-webpage bound extensions — working in News, Apple would have to back-port support to the older web views, like WKWebView, or make Safari View Controller more customizable and switch to using that instead. (Easy for me to say — I'm a writer, I don't have to implement it or real with the security ramifications!)
Either way, it's a technical limitation, not an evil plan. (I double-checked that with a few developer friends intimately familiar with action extensions, just to make sure.) So, enjoy News the way it is for now or find yourself an article reading app you enjoy more. That's the beauty of the app ecosystem.
Updated July 2018: Apple News still doesn't allow ad blockers, and this information is still a clear explanation as to why that is.