The entire point is to find more ways to make money. They will try new ways as longs as there is too big drop in the users.
You could've easily made this argument about Hulu right before it did the exact same thing being described here.
>If they put back ads, I believe that most people will simply cancel their subscription and get a renewed interest in ad-blockers.
Doing this successfully on your smart TV is a barrier that most non-techy folk aren't going to climb over. In the case of Hulu, most people just... accepted it. Same with the Amazon Prime ads you mentioned.
The main point of paying for Hulu was to be able to watch the shows. Youtube doesn't have that. (They tried to have premium-only shows but it was never much and as far as I can tell they stopped a long time ago.) So while youtube could obviously increase the price another $3, I don't see how they could split off a viable premium-with-ads plan. The premium features outside of ad removal are close to worthless.
As the number of users and the price go up, it may make sense to add a middle group: people who are willing to pay some smaller amount to remove (or otherwise reduce the impact) some of the ads.
Dunno, big corporations really like showing ads for some reason. I think Google, whose main business is ads, will try to shove them in more peoples' faces, and claim that YouTube Premium will be "reduced ads" and then there will be YouTube Premium+ that has no ads, for a nominal fee, of course.