Ads are only half the problem. The real problem with kids using YouTube is it's too easy for them to access any of the content on the platform.

If I could pay YouTube for the privilege of using an app where I choose exactly which videos are available, and no other video will ever appear on or can be accessed from that app, then I might pay for it.

IMO the only way YouTube can be kid-friendly is if there is an app where the primary utility is the ability to whitelist on a per video basis. There could be convenience methods like whitelisting an entire channel's videos with one action, but the whitelist needs to be built around a per video model.

Last I checked, they had nothing remotely like this as an option.

Youtube Kids has this. You can turn on a whitelisted content only mode. Then only content you share with the kids account shows up.

Approved content only mode.