I think the number of ads on youtube is controlled mostly by the content creators. I subscribe to a lot of channels and some are full of ads and some have hardly any.
If you or anyone is curious, this video does a good job of explaining how it works from the perspective of channel creators, and the problems that they run into with managing the way ads function:
The most notable part is the bit where Youtube is like "hey, if you guys dont monetize your videos enough, we will do it for you". And the default is like 13 ads as opposed to the 2 or 3 that the guy would set manually (with that being, you know, the sane number for a video of the length he was demonstrating).
I'm going to take a wild guess and say that, knowing Youtube/Google, they will eventually try to take more control themselves, feeling that creators arent being "aggressive" enough.
but they insisted people would love it
aaaaagh, this bit here, I dont understand this, WHY do people think this way?
I... just... it... aaaaaaagh
I cant process that. I mean I know there are people who really, genuinely cannot grasp that people hate ads, but still, I cant process that even knowing about it previously. Blows my mind every time...
What also gets me though is that it's not exactly impossible to make ads that DONT suck.
Like, if you're from the US, think of the ads that play during the Superbowl. People get genuinely excited to see those commercials (unless the quality dropped in the last few years?). Even I always liked to see them, I remember as a kid when the Superbowl was going someone would say "hey, they're gonna do some commercials now, wanna come see them?" and I'd run right in there (I dont actually watch the sports stuff, so I was never in the room until the commercials started).
Or, another example, there's a creator on Youtube by the name of Ryan George. He does a sponsored section at the end of each video. Pretty common for those using Sponsorblock to temporarily turn it off when watching his stuff, because the sponsored bits are just as darned hilarious as the rest of the video.
But most advertising companies seem utterly incapable of doing things like that, regardless of... anything. Instead, they opt for "just get in the viewer's face more". It's baffling to me.