Blocking YouTube ads requires injecting JS, it had nothing to do with Manifest.
AdGuard and uBO for example use the content blocking API to inject blocking "scriptlets" on sites where this kind of thing is required. That kind of usage is made much more inconvenient with Manifest v3.
To be completely honest, Manifest V3 technically is not THAT bad and it's capabilities at the current moment are really close to what major ad blockers can do.
There're still some things that bother me:
1. Debugging a content blocker is really inconvenient (not as bad as Safari though) 2. The future. What if its development stalls after it's released? 3. Google's goal (probably, for Manifest V4) is to make content blocking completely declarative, i.e. get rid of any host permissions and content scripts.
It's very easy to inject JS. I don't know whether you're talking from your own experience, but I wrote my little extension to replace uBlock (with my own list of rules and blocks) and to inject JS or CSS you just have to add a line in manifest.json which have nothing to do with blocking API.
I know it is easy to inject JS and that you can do it with the manifest file. But without the old content blocking API you can't dynamically inject different snippets on different pages based on filter lists for example (unless you inject something on every page).
I wouldn't be surprised if in the future, content blocking extensions won't be allowed in the store if they use such broad permissions for example.