Is there anything malicious InstallIQ does that I have missed?
From what I can gather, InstallIQ in and of itself does not actually install anything malicious - however, it does provide mechanisms for third parties to bundle additional "offers" with products at install-time, which is a very attractive proposition for malware/spyware authors.
Will there come a point that this becomes so ubiquitous that ESET stops flagging it as Adware?
I understand your concern, but I'm going to say no. There are many competing installer packages available in the market and many are considered more reputable. For example, MSI is Microsoft's preferred solution and integrates best with the likes of WSUS. Aside from MSI, other popular windows installers include NSIS (which I believe Mozilla use) or InstallShield. So InstallIQ has an uphill battle to become ubiquitous.
Secondly, there's a reputation issue. Personally, I would not distribute my software with any kind of add-on bundling solution, especially one which has links with malware distribution, however tenuous, if an alternative existed. Distributing nagware or malware to your customers will do nothing for your goodwill and continuing business. In this sense, such a solution is actually a security threat to you business model.
Finally, antivirus and antispyware producers are not going to ignore malware distribution in installers - even innocent installers could potentially be corrupted or be tampered with. Not catching viruses, nagware and spyware is not a good business model to use as an antivirus company.
So in conclusion, I think there are enough good reasons and sufficient pressure that such solutions are unlikely to become either ubiquitous or ignored, although they will continue to be used on a small scale both legitimately and to distribute malware.