I think the timing of the announcement and the reasoning they're giving is very suspect and very tone-deaf, but I work in an advertising company, and the idea that every video/channel, regardless of views, should have advertisements on it and that's valuable to advertisers somehow has been misguided for a long time. I think that YouTube made a mistake, not recently (though the messaging is a mistake), but in 2012 when they opened the floodgates to every single channel getting ad share.
I think it'll be interesting to see how this all comes together. Many small creators are making plans to bond together and subscribe to each other, but we've seen those promises before (which is why sub4sub is a well-known phrase) and I don't think that's sustainable. Other creators aren't your main viewership, because you can't just have a closed loop for this kind of thing to work (in my opinion). Others are vowing to quit the platform, which is, I suspect, part of YouTube's strategy. It may be too bloated to be sustainable, TBH.
I'm guessing YouTube will make some adjustments based on the outcry and creators will eventually either leave or get used to not having monetization (or find ways of passing the threshold) and it'll become the new normal in some way. We'll see.