(I work in advertising, so yes I know how it works :)
The hypothetical being discussed is "it's better to not use the service at all than to use it and block an ad". In this scenario, which impression would have been shown that now is not? Either way, no money is made by the content creator.
The only way that person would make money is the third scenario which it seems you're talking about, whereby I use the service and watch an ad (and yes, for some of us, that will never happen).
But such YT such the majority of any other service/work, isn't free: it requires a form of monetization in a way or another and YT uses advertisment. They have enourmous costs and they have much bigger revenues. If everybody blocks ads then they shut down.
You don't work for free, neither them.
I'm not a paladin of advertisment, simply saying those are their service conditions (that as a side effect provide money to content creators too).
Don't like their terms of use? Well, don't use their service.
Or adopt the other option they provide paying a premium account
The hypothetical being discussed is "it's better to not use the service at all than to use it and block an ad". In this scenario, which impression would have been shown that now is not? Either way, no money is made by the content creator.
The only way that person would make money is the third scenario which it seems you're talking about, whereby I use the service and watch an ad (and yes, for some of us, that will never happen).