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A WebmasterWorld thread finally has a response from a Google representative on the use of AdSense ads on proxy sites.
Google AdSense Representative, AdSenseAdvisor, said:
Publishers are permitted to place Google ads on the homepages of anonymous proxy sites, but not in the frames around pages viewed through the proxy. The concern is that the publisher is unable to control the content of pages framed by his ads.
So ads on the homepages of these proxy sites are OK. But ads within frames around the pages visible via the proxy is not allowed.
Why? The publisher cannot control the content in those pages. So the content can be in violation of the AdSense terms of service, which can get your account terminated.
Forum discussion at WebmasterWorld.
