I know I'm kinda late on the "Why did Google kill Reader" bandwagon, but it really bothers me.
First off, I know it's probably expensive to run the Reader servers, I get that. I also know that Google isn't getting money off of me through advertisements on Reader because there are none. BUT! Google could definitely find a way to earn money.
First, lets take a look at my time spent on reader.
Here's the simple solution: Either insert ads into the RSS feeds themselves, or close the service off and make everyone use the official Google Reader client on Android and iOS and have ads show up there. Simple.
Also, just for fun: Here's how I use the star feature. I set up IFTTT.com to find the newly starred items and download them into my Dropbox. This way, any time I come across an amusing image in my feeds, I simple press 's' and the image shows up in my Dropbox. Later, when I'm with friends, I sometimes open up that folder and we have a fun time looking at them. It's great.