The automated system may have been a bit overzealous in this instance though.
To then punish a site that merely mentions the downloading, and the punishment being an Adsense block is incredibly out of order. Youtube cannot dictate the content of another site. So so evil, their motto is being revealed for the smokescreen it is.
As for the adsense TOS it does consist of other similar clause prohibiting it being run on "piracy" or counterfeit website to appease certain industries, so it's not limited to protecting Google's stuff. One would suggest (as you did) that this keeps Google from maximising profits but these are concessions they are forced to make.
But of course there is a big distinction: Google controls the stream; it doesn't control the downloaded video. With control, it can choose to a) force you to watch an ad (as you mentioned), it can b) pull a video for any reason, including copyright infringement, content objection, failure to pay a subscriber fee, etc., c) ask you to be a subscriber, for either a cost or at least registration, etc. None of that is possible if the video goes out into the wild and can be, for example, freely traded among users through file sharing or, worse, alternate video hosting and streaming by a competitor.
The videos trove is their treasure, and they guard it.