Well at some point Google needs to be sued by not-big content owners. Frankly I think they would welcome that suit which would charge them with restraint of trade and maybe breach of contract. They could 'lose' that suit and then go back to making it much harder for the big labels to pull things down.

The reason I think they would like to lose it is that they know they are pissing off users, but their content strategy is walking (or perhaps running) under the shadow of a falling dinosaur (the labels) and they need to be sure not to be there when the corpse hits. This would give them an excuse to run faster.