Microsoft has plenty to lose here. Push this too far and they can easily alienate the media partners they need for all sorts of things (like providing content for Windows tablets and Windows Phone).
Where did I say that ad-free YouTube was pushing this too far? I think both Microsoft and Google have plenty of ways to sort that out.
The download button, on the other hand, is a completely different kettle of fish. If people start using Microsoft's Windows Phone YouTube app to download and distribute YouTube video I think that will have tons of impact, way beyond the existing, lower-profile downloaders, no matter how tiny WP's adoption is.
