Collecting data on AIDS patients, cancer sufferers and men with erectile dysfunction is simply too personal, according to a new proposal from the Network Advertising Initiative, a trade association that represents the likes of AOL and Google.

While the decision not to use data pertaining to certain diseases may seem magnanimous, the group hasn't nixed the idea of exploiting health-based information altogether, according to a story in The New York Times.

Parkinson's disease, congestive heart failure and warts will all be conditions deemed fair game by the group, which also didn't rule out the idea of storing data collected from users now deceased.

The proposal, which can only be described as a bizarre patchwork of rules, highlights a growing need for regulation of behavioral targeting, despite the fact that many in the digital advertising business insist that privacy advocates completely miss the point.

Just today, several internet companies sent an open letter to New York lawmakers expressing opposition to a bill that would put strict limits on the collection and use of personal data online.

"[The bill] is unnecessary, most likely unconstitutional, and would have profound implications for the future of internet advertising and the availability of free content on the internet," wrote Jim Halpert, general counsel for the State Privacy and Security Coalition, in a letter to Assemblyman Richard Brodsky, the Westchester County Democrat sponsoring the bill.

The coalition counts companies like Yahoo and Google among its members.

At the same time, the FTC is also considering self-regulation for the online advertising industry. Calling for industry comment on its proposal to limit the extent to which internet companies can collect and user personal data, the FTC heard from an array of trade groups, all of which expressed concern that too much regulation would stifle the growing digital advertising business. The IAB, The Association of National Advertisers and the American Advertising Federation were among the group that called on the FTC not to push for what the groups called overly harsh self-regulatory measures.

The rules, which would allow users to opt out of tracking altogether, are part of an attempt by the FTC to get the industry to self-regulate. The FTC, which could ultimately promulgate its own rules, has yet to take that drastic step.