It would affect the people it's intended to be used on the least, and affect the people it's not intended to be used on the most.

You're pretty much describing DRM in a nutshell. This limitation never stopped it in the past.

This is a good point. Yes, in theory chrome and android are big enough now that youtube could add widevine and there won't be a significant impact to their bottom line. Maybe there are still old devices that are running obsolete/frozen versions of youtube devices. Or more optimistically, there are still trace amounts of 'don't be evil' left at google.

Wouldn't they get sued for anticompetitive practices though? If other browsers/devices can't view the content then it seems like they would have a point.

Widevine is a joke, L3 at least. You can easily dump all video and audio frames by hooking into Chromium's CDM wrapper.

And nobody cares about L2, and manufacturers have awful security and accidentally leak L1 keys all the time.