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It's unfortunate for Streamus, but expected and reasonable in my opinion (especially since the developer knew he was breaking the ToS from the beginning).

YouTube presumably has negotiated contracts with the content owners which allow them to stream audiovisual content under a certain set of constraints. Many content owners distribute their content in other ways (e.g., selling music on the iTunes store), so they allow their content for "free" on YouTube only because they know that the audio component will be accompanied by a video of their choice and they will be supported by ads. These content owners wouldn't want YouTube to be used just like an ordinary music streaming service without being compensated properly. In order to hold up their end of the deal, YouTube has to enforce their terms of service, otherwise they risk losing the contracts that they have already negotiated.

If Streamus wanted to keep doing things like they were before these changes, then they would have to go and negotiate contracts with the content owners, just like YouTube had to do. Streamus has to abide by the ToS (which is in turn the terms of the negotiated contracts) if they expect to use the YouTube API.