At the risk of Godwinizing the thread, one of the first oppressive operation against Jews in the Reich was a campaign "Kauft nicht bei den Juden" (Do not buy from Jews).

It did not carry weight of the law, you COULD still go to a Jewish shop and buy something, but the message was that the society disapproves, the state disapproves and you are a dirty being for doing so.

The result was severing of an important daily interaction between Jews and non-Jews. Once such casual contacts were severed, it was easier to convince the society that all Jews were evil, without the people having doubts like "but ironmonger Katz is such a nice person!" They did not know ironmonger Katz anymore, only a caricature of his people.

This is not the same thing. The campaign you refer to was created to harm a large group. Demonetization targets only the content makers but not their audience.

What, do content makers make videos purely for themselves? That's the whole point of monetization.

As rayiner said, the government can't get around the First Amendment's guarantee of freedom of speech by only allowing the seller of a work to do so for free. Demonetization of certain topics on a blanket basis means that content creators have less incentive to make videos that they would have made otherwise, harming their potential audience.