The days before YouTube there wasn’t free HD video hosting. We had things like Newgrounds which were way, way worse when it comes to ads and the videos were like 240p.
But it was mostly flash sites back then because video costs a ludicrous amount of money to host, and it was way worse then.
YouTube absolutely will not make money without either ads or fees.
Some governments are doing the right thing by giving people control over their information and how it’s shared online, yes. And that does directly affect YouTube’s profitability.
So now YouTube is being forced to offer users a choice in how they pay. That payment can take the form of cash or private information.