Many of the problems with sponsored content stem from the inherent inefficiency and deceit in journalism itself.
Publishers, as in the place where journalists publish stories and brands publish ads, are middlemen. Totally unnecessary and inefficient. Instead, brands should directly sponsor content people want to read, instead of trying to interrupt them while they read stuff they like.
It’s also a ridiculous conceit, as you’ve pointed out, that editorial is somehow divorced from advertising. In this way directly sponsored content is more honest.
There is no reason brands can’t directly fund “real” reporting. In fact I think it will begin to happen soon.
In the meantime, discouraging writers away from brands and towards “journalism” ties them to an inefficient, inauthentic, and ultimately doomed model of content production, funding, and distribution.