Jason Kint, CEO of Digital Content Next, gave some great insights into the Google AdSense platform in a hearing in the US Senate on June 16th, 2019.
"Almost all the incremental growth in our industry is going to Google and Facebook. In the case of Google, they have cornered the advertising server market. (...) On the demand side, because Google oversees more advertising demand than any of the top five advertising agencies, Google is able to in effect set the prices of ads in the auction markets. Google determines the rules of their auctions with full knowledge of whether it will help Google or they will help publishers. It can't be both."
There is a very simple reason why Google AdSense is so dominant: It is the by far best alternative for publishers who want to or need to service advertisements. There is, practically speaking, no viable alternative.
<head></head> section of web pages is enough to enable "Auto Ads" advertisements which are placed where Google thinks advertisements will fit in and maximize revenue. And that's it, that's all a publisher has to do.
In comparison, services like TradeDoubler require you to apply for each advertisement "partner". These partners can change their terms or stop accepting traffic from served advertisers at any point in time. Keeping up with their changing partners, the ever-changing terms, the changing promotional material and so on a full-time job.
Some services like AdReactor offer similar services for publishers and advertisers. We tried using AdReactor on this site. Every page impression got a single banner advertising "Click here to download" with no indication of what you would be downloading if you clicked that advertisement. That service is a joke compared to Google AdSense.
Google AdSense is so poplar because it really is the best choice for publishers who want to cover server costs using website advertisements.
Using a hosts blacklist file listing the servers used by both Google Adsense and Google Analytics is also an alternative. Using a third party advertisement-blocking DNS service like NextDNS may also be an alternative - depending on your location (NextDNS is unacceptably slow from many locations).
The advertiser side of AdSense is called AdWords. AdSense is for website publishers, AdWords is for advertisers who would like to advertise on sites using AdSense.