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For what it's worth, now I've said my piece about the "should I tell them I will not be paying?" nonsense, I actually agree that "the official home page" adwords buy is tacky, misleading, and I wouldn't do it as an affiliate. But the reason it's wrong is deception of the surfer, not protection of the program owner's trademark.
It is essentially impossible for affiliates to promote programs without using the intellectual property the programs make available. Programs make such intellectual property available in differing degrees -- but I have never yet seen one that fully and successfully delineates in its TOS the precise outlines of which intellectual properties affiliates may use and which intellectual properties affiliates may not use. A few programs try, but most take a very relaxed approach, because anything else is sheer folly.
In my opinion it is the very ESSENCE of the affiliate arrangement that the affiliate's job is to figure out marketing angles the program owner hasn't thought of (yet). And I have very little but contempt for the program owner who reacts badly when one such angle is successful. If you didn't think of it and weren't already doing it, then you shouldn't recoil in horror and demand the right to profit exclusively from it once you see it working.
However, any good affiliate program should have a catch-all provision requiring affiliates to refrain from deceptive advertising practices, and it would be under that provision that I'd ask this affiliate to desist from buying "official home page" advertising unless he's in fact sending the traffic straight to your official home page.
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