demanding they pay for a service that is worse than what adblockers already offer
Or you could say they have tolerated adblockers until now and allowed you to use their service without a paywall. Yes, it sucks, we’re used to blocking ads, but it was like having free lunch.
whilst also running a business that relies solely on critical mass of users rather than any actual value that youtube themselves can uniquely provide
There have been plenty of other platforms who tried to do what YouTube did, they all failed. YouTube provides a massive infrastructure, about one hour of video is getting uploaded to their servers every second. And it must be kept around, so the amount of data only goes up. A total nobody can upload a 100 hours of video and YouTube will gladly accept that and still make those videos available 5 years from now.
To say they don’t provide a relatively unique (or at least very difficult) service is insanity.