[raskull]

Sadly those in the content business have made a clear distinction between "streaming" and "downloading", in legal and licensing terms. And so such tools would facilitate the download of music videos, for example, which youtube is only allowed to stream, and there lies the crux of the matter.

As for the adsense TOS it does consist of other similar clause prohibiting it being run on "piracy" or counterfeit website to appease certain industries, so it's not limited to protecting Google's stuff. One would suggest (as you did) that this keeps Google from maximising profits but these are concessions they are forced to make.