splicing video is pretty easy - there are certain points - key frames - where video streams can be spliced with nearly zero computational overhead, no loss of quality, no loading delay, etc.
i dont think what's stopping google is a technical difficulty problem, but a scale problem (as well as a lack of real need atm).
I suspect that google doesn't actually lose too many to blockers, as mobile accounts for a large fraction of youtube's traffic (and so far, not that many people actually use a hacked youtube client to view videos).
It's probably cheaper and faster to have a pre-encoded video, cached at the edge.
Adblocking is very much on googles radar. But they realise it is a cat and mouse game - and whenever you start playing that game, you run the risk of ending up in a position worse than you started with. They currently get 80-90% of the ad impressions they try to display, which is pretty good compared to a hypothetical future where someone like Microsoft makes an adblocking-by-default browser and courts force Google not to block them.
Indeed, we've done exactly this with production quality adverts where we'd add real-time information (e.g. betting odds) into the ad at selected points.s
I suspect that google doesn't actually lose too many to blockers, as mobile accounts for a large fraction of youtube's traffic (and so far, not that many people actually use a hacked youtube client to view videos).
It's probably cheaper and faster to have a pre-encoded video, cached at the edge.