More premium users means fewer ad slots to sell. Which should drive up the price of each ad spot. Or, as you suggest, they can cram more ads in per video, and risk repelling the audience. I wonder what the equilibrium point is.
Eventually they'll just start driving up the price of premium too to make up for the lost ad revenue. The equilibrium is probably that no one bothers to use it without a subscription, and the subscription is way overpriced.
No wonder Chrome has been cracking down even harder on ad blockers recently...
