> They're a for-profit business, so again, why do you expect your content to be hosted at a complete loss while you monetize on external channels?

This is begging the question that hosting non-monetized content is actually a net loss for YT. I'm saying it's actually not, instead the aggregate volume of free content keeps viewers on the site longer, and the higher viewership numbers result in a significant net profit.

More likely, YT decided that this arrangement, while profitable, wasn't making enough money for them, and because they must show their investors ever-increasing profit margins they decided to mildly poison their user experience in exchange for higher profits.