Note that a significant amount of videos on youtube, and in particular many of the highest quality ones (e.g. educational material from schools like MIT or individuals like 3blue1brown) are Creative Commons licensed, so in terms of copyright, you are free to download and share them. Many including MIT's lectures are also NC and SA, so having the ability to save them and strip any ads is obviously in accordance with the wishes of the creators.

As far as youtube's wishes go, I don't think people should have much concern for a company that's engaged in predatory pricing for years to develop a monopoly through network effects.