I'm a gamer, and I've been gaming since it wasn't gaming, just "NEEEERRRRDDDD!". In fact, what you describe is already done in some games; from billboards that have advertising which tracks how long the player "looks" at it, and changes, to particular phones or even advertising the parent company.
This isn't universal... in one genre I don't play at all, the sports-game genre, it's not a little thing... it's HUGE. In that context, you have established advertisers, you can often customize appearance based on name brands etc. At other times, it's on the line of breaking the sense of suspended disbelief... seeing a pepsi billboard in the far future is not a good move. Then, some games just don't mesh with advertising in-game at all... you're not going to play Dragon Age: Origins, and accept a peddler walking by saying, "REAL Graywardens eat Wheaties!"... you'd lose game-sales and it would become a scandal.
One other barrier is that many games are not the kind of thing major brands want to associate with... too violent... ehhhhh maybe an issue. Sex? *KLAXON* no way buddy...
Then again, good luck playing a snowboarding game without mountain dew being hocked at you every time the game pauses for breath, and likewise, you'll see everything from USArmy to Firestone ads in a racing game.
As much as younger gamers like to think they'll stand up to anything, if they're favorite game comes with hooks they dislike, but can bear... they'll buy it. Still, this was meant to be more universal by now, and it's still very "niche" for a variety of reasons, not the least of which is backlash. In one case, a game (Battlefiedl... future... something) was lambasted in almost all reviews for billboards of modern products in a post-apocalyptic future.
ON the other hand, you have a game like Fallout 3 which was HUUUGE, yet they advertised nothing. Well, you did have a soundtrack, a pretty classic one too, and now you have generations of kids humming, "I don't wan't to set the wooooorld ooooon fiiiiiiireee..." A lot of time companies find they want to use what ad-space exists in games for their own benefit.