Definition of "Content" in their Terms of Service:

Content on the Service The content on the Service includes videos, audio (for example music and other sounds), graphics, photos, text (such as comments and scripts), branding (including trade names, trademarks, service marks, or logos), interactive features, software, metrics, and other materials whether provided by you, YouTube or a third-party (collectively, "Content”).

Where is advertising defined as "Content"? (EDIT: For clarity, this paragraph is my own words; the previous paragraph was the quote from the ToS).

Further, there's the "Our Service" paragraph:

"The Service allows you to discover, watch and share videos and other content, provides a forum for people to connect, inform, and inspire others across the globe, and acts as a distribution platform for original content creators and advertisers large and small."

The service acts as a distribution platform for "original content creators and advertisers", two different categories. There's content (made by content creators) and there's what advertisers produce.

If Youtube wanted to define advertising as part of the Content (capital letter because in legal matters, definitions in the contract matter, and that's the term that they defined), they had plenty of opportunity to do so.

The statement by Google that blocking ads is a violation of their ToS is, of course, their opinion. But what ultimately would matter in a lawsuit is the contract. And nowhere in the contract do they state that advertising is part of the Content.

Their best argument in a lawsuit would be that adblocking is "circumventing" part of the Service, because they have defined being a distribution platform for advertisers as being part of their Service. But considering that the actual function of adblocking is simply not making HTTP requests, it would be hard for them to make that hold up in court against a skilled lawyer.

I've looked at it, and I came to the conclusion that the "advertising is part of the Content" argument does not hold up to the actual terms of service, and that the "adblocking is circumventing the Service" part does not hold up either: to say that something running on my browser, that makes no attempt to change their code and only skips certain HTTP requests, counts as "circumventing" features is a stretch. It's the best argument, so thank you for making it. But it's just not strong enough to hold up to the "If Youtube wanted to explain that adblocking was a violation of the ToS, they had plenty of opportunity to lay that out in detail in plain English (well, lawyerese) in the ToS itself" argument which any skilled lawyer would present in court.

So I'll grant that it's possible to read "adblocking is a violation of the ToS" in the terms, if you peer at the penumbras and emanations of the wording. But at no point did they take the opportunity to lay it out in clear language. And statements from a spokesman are, legally speaking, worthless; only the language of the contract matters in a court case.

P.S. I've upvoted you, since you've actually taken a real look at the Terms of Service, unlike the guy making that grocery store analogy.