Sure, granting view credits for ads is a little more complicated, but definitely within googles scope.
So they can block everyone, unless you either pay or watch ads. Unpopular, sure. But they have a huge library and a constant stream of new content, so enough people would put up with it. They can also start soflty, and only tighten the screws later. Lets start with one ad per day.
The reason while they have all the content, is precisely because they can generate revenue for channels. I much prefer payment through subcription and ad views to annoying in video sponsors and product placements
That's Like saying I don't pay rent to the landlord, the house has already been built.
If a society agrees on this being right, no more houses will be built. And no movies will be made.