It's not really a matter of just turning it on when it comes to the kind of scale that YouTube has on their catalogue. It's practically impossible to retranscode the whole catalogue, so you're more or less stuck with only doing it for newly ingested content, and even there the tradeoffs are quite large when it comes to actually having DRM.

I think we can safely assume that the only content under DRM at YouTube today is the content where it's absolutely legally necessary.

DRM is added at the last hop before the content is sent to the client. It has to be, because the key is different per client.