if the button appears, the content is already available for download by the user. thus, chrome offering another option for consuming the content can be deemed as good usability.
the issues with your business model are completely separate from this feature. hiding features from users just because they are technically inept is ridiculous and has no place in open source software development and the Web Platform.
thus, chrome offering another option for consuming the content can be deemed as good usability.
It's not good usability to promote a function that was possible before but contrary to the terms of use and not widely used in practice, particularly in a way that misleads a significant number of users into thinking that it is now permitted use.
put up a paywall and switch to DASH.
That's exactly what a lot of sites have been doing for the past few months. Others have been going with full-on DRM. The open approach to the Web that you seem to value is dying in real time.
Unfortunately, that work meant wasting time and money updating infrastructure that could otherwise have been spent on providing more content. It meant dropping support for platforms that don't support the required technologies like MSE or EME, to the detriment of both users on those platforms and the site operators if they also lose some income. It meant removing the possibility of turning a blind eye to occasional downloads in cases like people wanting to watch something offline because they genuinely don't have a good enough Internet connection where they're going to be.
Exactly no-one won from this, and several groups have lost to varying degrees. How is this a good outcome, in any way?