Becoming ever more obnoxious with ad placement because your ad-supported service is losing money and you don't know what else to do is a classic late-stage-enshittification step. It is usually the last one before the service becomes openly hostile to its users and partners and becomes a mostly-worthless relic. I did not think Youtube was at that stage or even close to it but maybe it is.
I can't really tell if Youtube is losing money or not, but it creates about $8 billion per quarter, and Google's overall operating expense is $55 billion per quarter, and I think it actually might be a safe assumption that Youtube is a pretty decent amount of that expense given its scale and its storage, bandwidth, and employee-resources requirements.
Here's the thing about YouTube. From the very beginning, it was a video-hosting platform. Users create content. They upload the content to YouTube's servers. Other users view the content, and upload their own. A simple formula, no? That's why their pre-Google slogan was "Broadcast Yourself". The thing is, storing video data long-term is expensive. This is where Google comes into play, because, unless you've got Google's money, you cannot afford to store literally 100s of Yottabytes of video data, not for very long, anyway. Even if YouTube becomes a "mostly-worthless relic", there's nobody who can readily replace it. I suppose someone could create a fediverse version of it where you simply upload your own content to your own server and then sell (or give) access to other users, but it would be slow to start, and small as not everyone can afford their own server to host their content on. Or, a service that aggregates videos by scraping them from from video servers that it has access to, creating a hub for users to enjoy the content made by other users that is stored on their own servers.
Yeah. As with many things, "Can this make money?" is not the same as "Is this a nice thing to have around?" and the disconnect between the two when capitalism tends to assume they'll be the same thing, is a source of unhappiness in many ways.
Funnily enough, one of the things Reddit's PCM community tried to push was the concept of nationalizing YouTube because "it's a public service."
They thought the average browser was too stupid to ask why all these Nazis wanted that, where all of a sudden the 1st Amendment actually comes into play, and now you can't take down their blatant misinformation and hate speech.
Idk. This was around all the drama of Trump getting banned from Twitter, so the separation between a company censoring things that might cost them money and the government doing it is pretty clear in people's minds, and nationalization just isn't something the forces of neoliberalism do, at least openly. It just never had a hope of becoming a real thing.