Nope, it's not asinine, it's perfectly logical. It's a free website where without any cost to us, we can watch or upload videos. As a viewer, we may see ads. As a creator, we decide if we want ads to show or not. We do so knowingly that this is the business model.
Could Google be doing harm to YouTube? Without a doubt, there is potential that users get fed up and go elsewhere. As a viewer, it is the dominant source of entertainment and information. As a channel, it allows me to be creative as well as earn revenue from the ads.
When real competitors to YouTube show up (Amazon), I will be there as well.