I haven't asked Google whether using this plugin to display ads is not permitted or not, but there is this line in the Google AdSense Program Policies:
A site or third party cannot display our ads, search box, search results, or referral buttons as a result of the actions of any software application such as a toolbar.
A PHP plugin ... It's kinda grey whether it's a software application or not.. So, i guess use at your own risk then. =\