How expensive would it be for YouTube to encode the ad directly into the video stream?
If that ever happens I can't see any blocking solution other than have an AI pre-screen the content, identify ads and jump over them.
Youtube could try to serve everyone a different video stream with ads added at different times. But even that's unlikely to work: around the turn of the century we got DVRs that could automatically skip commercials in recorded television signals, and later DVR software could do the same. There are a couple of techniques to do that, but the most obvious is that commercials and commercial blocks have common lengths and very different sound from the actual program (louder and mixed differently). The same techniques would work on Youtube ads.
And of course most of the youtube ad revenue seems to come from a somewhat limited selection of ads, so fingerprinting the video stream for segments that reappear in different videos across the userbase is also a viable technique.
This is an arms race youtube can't win, no matter how much money they are willing to throw at video encoding.