PrivDog's functionality is to replace advertising in web pages with it's own advertising "from trusted sources".
So it's an ad-replacer, not an ad-blocker, but works in a similar way to other ad-blocking proxies like Proxomitron. The main problem here is in bad certificate verification, which seems to be a common trend with these bugs (Apple's "goto fail" was another much-publicised one.)
As I mentioned before about Superfish, I really hope these discoveries aren't used as an excuse to take away the right of the user to choose what he/she trusts, in a similar way to how "terrorism" is being used as an excuse to further surveillance. In contrast, it used to be really easy to enable/disable certificate verification completely - browsers had configuration options to do that. (Why? So I can use a proxy that doesn't resign certificates. It means that instead of trusting the browser, I can trust the proxy to do the certificate verification instead; and I should absolutely have the right to do that and inspect what data my traffic contains via that proxy.)
So it's an ad-replacer, not an ad-blocker, but works in a similar way to other ad-blocking proxies like Proxomitron. The main problem here is in bad certificate verification, which seems to be a common trend with these bugs (Apple's "goto fail" was another much-publicised one.)
As I mentioned before about Superfish, I really hope these discoveries aren't used as an excuse to take away the right of the user to choose what he/she trusts, in a similar way to how "terrorism" is being used as an excuse to further surveillance. In contrast, it used to be really easy to enable/disable certificate verification completely - browsers had configuration options to do that. (Why? So I can use a proxy that doesn't resign certificates. It means that instead of trusting the browser, I can trust the proxy to do the certificate verification instead; and I should absolutely have the right to do that and inspect what data my traffic contains via that proxy.)