Hi there,
The WordAds program is for folks who want to put ads in their blog to share the revenue. The information you found is letting you know that you must own a domain if you want to participate in the program. It sounds like you want the opposite, to never have ads on your site.
The ads you are currently seeing are because we sometimes display advertisements on your blog to help pay the bills. This keeps free features free! We only run them in limited places, and we do not show ads to logged-in readers. To eliminate ads on your blog entirely, you can purchase the No-Ads Upgrade from the Store in your dashboard.
http://en.support.wordpress.com/no-ads/
Having a custom domain can be a great feature for your site, but if your only intent in buying it was to eliminate ads, you can return the domain for a full refund for 48 hours from the time you bought it.
Let me know if you have any more questions I can help you with.
Best!