It depends on the cleverness of creatives of Advertising agencies that how they place their product. The entertainment value does go down if there is an excessive or unecessary promotion of the product.
The catch in it is to read the full script of the show or movie and then find a clever way so not to harm the entertainment value and original script/screen play of the show
I don't think that a sensibly done product placement ad devalues the movie or a TV show. If a product is shown in usage with a logical and apt timing, it may add value to the viewership. An Aston Martin or a BMW car used by James Bond is not an eye sore for a viewer.
