Their clicks, watch time, shares, likes, comments, searches, related videos etc provide valuable training data for recommendations. They may share the video with others who watch with ads enabled. They still watch product placement, endorsements and advertisements embedded within the video, incentivizing creators to continue using the platform. They likely use the service on multiple devices, only some of which skip ads.

Alienating their young, tech-savvy and socially connected & influential users may not harm their bottom line in the financial quarter they role out the change, but it could certainly negatively impact the longer term prospects and give an upstart the opportunity to challenge their current near-monopoly.