I'm starting to get tired of Google favoring the label and studio cartel and being against the regular people through Youtube's ContentID system and through increasingly more stuff like this, just because they'd rather be on the safe side.
Because there are lots of people who make sites that are essentially pirate content + ads and there are lots of people who will sue Google if they find them sending money to a pirate site.
I'm assuming this was an algorithmic mistake, but you can understand how it's hard for them to research the copyright status of each thing. I mean, hypothetically, what if this guy was lying about it being his own work, or the copyright was disputed by someone? Google ends up in the middle of it and there's no real upside for them, because there are a lot of people who are quite simply out to get Google over copyrights.
It's not even a matter of Google being sued -- sites that link to pirated content are frequently sites that advertisers don't want their ads to run on, even if those sites are perfectly legal.