I think Google was expecting Youtube to no longer exist as an entity in its own right, but just be a part of Google+ after they integrated all of their properties into a massive Facebook killer social media app, but that was a colossal failure.

Now, I think they want to use the infrastructure to build something that competes against Netflix and Amazon, but to do that they have to destroy the existing economic incentives for content creators and drive off as many content derivative users as they can (anyone incorporating or using licensed content, even as covered by fair use), and basically rebuild Youtube from the inside out.