Youtube has faced a series of controversies that led to the 'AdPocalypse', and now the demonetization of people with not enough active subscribers. The media has gleefully gone after Youtube in these stories (the latest being inappropriate videos from Logan Paul and the proliferation of algorithmically-generated videos that show disturbing cartoon content to children.)
YT creators should start pushing back---by saying wait, the algorithms and ads help small creators putting out good content as well, not just nefarious actors---if they don't want the scope of monetized content to get narrower and narrower.
Otherwise it's easy for the public to align behind criticism of 'big tech' while overlooking that these are platforms which people depend on to express themselves and even to earn income.
But I think you're right that a majority are probably only aware of the Adpocalypse in the abstract, if that.
The linked video is about 1 year old but he has made several comments about the demonitization process since then as well. I linked to the older one because the issues with YT accounts and income has been going on for quite some time.
If you have a financial arrangement with any company, and that company decides to change their policy arbitrarily so that they can justify not paying hundreds of thousands of people like you "because our policy excludes them", when a day ago they didn't, normally that would be various immediate court cases and no way for that company to win on any reasonable ground.
This is surely not the least important reason.
This is false. If money is being exchanged for services or (digital) goods, then there is a financial arrangement, in the form of an informal contract. But it's still a contract.
In the case of YouTube, it would probably even be considered a formal contract since there are the written "Monetization Criteria", "Partner Program Policies", and YouTube "Terms and Conditions" that the creator agrees to. This agreement to written requirements is a "meeting of the minds" and thus constitutes a contract.
I think this service is fundamentally very hard to produce. For all its faults with monetization, it's not clear it can be done better (beyond toy scale). It's clearly not profitable to have humans match videos with advertisers, and computers are inevitably going to screw up, like in this instance. edit: it seems this case is just a basic policy issue, though that policy is a consequence of trying to avoid attempting to solve this problem for the long tail of small time uploaders. I just assumed it was another false positive based on the title.
Keeping advertisers and uploaders happy seems like an almost impossible task. Google may not be doing very well at it, but that doesn't mean it's easy to do better.
The problem is actually bandwidth costs; unless you're at the scale of Google (where bandwidth and storage is really cheap for you), advertising alone wouldn't even pay for the service itself, let alone pay the uploaders.
I imagine a world where creators pay someone for video distribution, but also plug-in advertising from third party ad agencies that have learned to match ads to content due to advantages in machine learning. Same as text today.
In minds of general population, YouTube is a search engine. The was majority believe that YouTube aggregates the content all around the Web. Why wouldn't they? The content shows up there minutes after it originates somewhere else. It's almost impossible to prevent it from gaining any traction on YouTube. Another company just tried to go against them. You can read how it went here https://vid.me
It wouldn't even have to be perfect like a lot of publishers usually demand, most youtube videos would be fine if the payment would simply authorize the user to stream and download the video as they wish.
An arbitrary youtube video  is 56.69 megabytes (7m36s of 720p MP4). AWS outbound bandwidth, which I'm told is outrageously expensive, costs $0.050 per GB, so a single view costs $0.0028 to serve.
Seems to me bandwidth isn't an insurmountable problem - if you can get the mix and volume of viewers, creators and advertisers on board, and make $.10-$.30 per view, and you can keep your overheads for engineering, support and moderation low.
You always forget the huge(?) amount of un/low monetizable content/traffic/countries.
They are still growing exponentially.
Why doesn't YT just rephrase it as "you earned $1, but reviewing and administration costs are $10, so you get $0"?
I previously worked for a business where both the marketing and customer service departments handed out promotional credits to users like candy, without accounting for them. One day we got a new CFO, and a report on these credits was one of the first things he asked for. He sure wasn't happy to discover over $2.5 million dollars worth of credits idling in users' accounts with no expiration. While it's unlikely any significant percentage of them would have ever been cashed in, there is no guarantee and legally the business is on the hook to cover them.
Is the term "banking", by any chance? This is the entire business practice of banks.
As of today, your channel, TubaPeter.com, will no longer have access to monetization tools associated with YPP because it doesn’t meet the new threshold of 4,000 hours of watch time within the past 12 months and 1,000 subscribers.
I mean, if it'd make him happier, Youtube can disable his channel completely for infringement.