I think you should not be morally complicit in evil and so all companies should do what they can to avoid profiting off evil. Good for Google.
That being said, the assumption here is that Google withdrawing support will hurt the sites. I doubt it. I expect both that the sites will find shadier ad networks, and they'll peddle the same shit but give their users more viruses--and they'll turn to membership models. A site that literally posts fake news won't survive off donations, but a site that posts bullshit conspiracy nonsense certainly will, because the former annoys users and the latter has users hooked. Plus, donation appeals are so easy. "The man is literally suppressing the truth, help fight it".
I think the best route is not just to ban advertising, but also massively down-weight search results, and have social networking sites do the same. If you still allow people to post fake news but only show it 1/20th of the time you do now, engagement will drop like a rock and that's what actually will end the sites.