If rolled out widely, this would make web browsers and third-party YouTube clients without a DRM license unusable for YouTube playback, download, etc. This would include almost all open-source web browsers and almost all third-party YouTube clients. Archive link to reddit post about this
More than 500 hours of video content are uploaded to YouTube every minute (reference). The cost of operating this system is astronomical. Building a competing platform is entirely out of reach unless you have nation-state levels of wealth.
YouTube’s costs are effectively subsidized by Alphabet (Google). All of the restrictions being implemented are about trying to make YouTube profitable, especially by protecting the ad revenue stream.
Youtube is already profitable. Has been for like 5 years