Taking all that at face value it certainly disregards the actual user, who in the vast majority of cases will not be subscribing to this new service. It sounds like Google+ all over again; where Google is spiting the vast majority of its users (removing content that they wish to see) in order to launch a (likely to fail) service that directly replicates one or more services already widely available.
No, it doesn't affect the non-subscribing users. They will see ads either way. It is the artists and the subscribers who would be adversely affected by artists that do not participate.
It is the artists ... who would be adversely affected by artists that do not participate.
Adverse affects for independent artists who do not sign up translate to adverse affects for non-subscribers that want to watch those artists on YouTube.
