YouTube isn't competing with Netflix/Disney+/etc, they are the ones competing with YouTube and the idea of infinite hyper specialized crowdsourced content which is most personal and intimate than anything they could ever offer.
Makes perfect sense to kill it.
That being said, these creators already get a ton of views to start with, and as cool as the highly produced content was, I don't think it realistically brought more views than the normal videos.
Take all the FPV train videos made by train engineers on their routes. Or the dudes who sit around at popular inlets in Florida recording lake boats attempting (and often failing) to go into open ocean. Or the person who does ASMR car detailing. Or the dude on Australia who jets out plugged drains. Or the people who live stream airplanes landing at LAX for 10 hours.
Nobody would ever put that onto a cable TV channel yet each of these content creators have a loyal audience that at minimum funds a hefty beer fund.
When I pay for Netflix, I expect high production value. There's no way I would pay for crowdsourced videos made by amateurs when I could watch it for free on Youtube.