I do wonder if they were to offer exactly that - a version with and another without ads, what would happen. This is not without precedent after all. I paid more for my Kindle so as not to have to be advertised to when I want to read.
If most YouTube users were Premium subscribers, it would more than double revenue. Premium subscribers are worth more to Google than free ones are in ads revenue, by a lot. Monetized channels receive orders of magnitude more revenue per view from Premium subscribers than free ones.