> Isn't this shortsighted in the sense that it removes all incentive for the creators to create?

Before ~2006, we all had blogs, and posted regularly with no financial incentive; imagine a web where people posted to share their expertise, and that's what the early internet was. Money ruined this.

Also, early youtube (and google videos) had plenty of stuff to watch. Would youtube be full of "professional" "content" with no ads? Probably not, but there is a world in which youtube subscriptions actually gated videos that required a budget to make.