They make more money via ads than they ever will with a hard pay wall. The innumerable advertisers paying google/youtube will always pay more than individuals paying for a subscription for no ads.

That's why people who paid for no ads will eventually end up with ads again, despite paying. They don't care if we pay or not. They want that sweet sweet ad revenue.

The sad fact of the matter is that we live in an ad based economy. Advertising is more profitable than selling an actual product. Having a platform to sell infinite ad space is a money making machine, plus people making free content for them to lure in more people to watch said ads. It's super fucked up on youtubes part.

YouTube now exists as a billboard first, content second or third.