The difference is that Reddit was still largely usable after the API changes and most affected users weren’t getting banned. Some people have a high tolerance for ads, but a lot of people would find YouTube unusable without an ad blocker, and if YouTube was banning people, they’d be destroying a lot of the inertia against going somewhere else.

If we say that something like 20% of users on YouTube are using adblockers, that’s a big enough addressable market for a competitor to seriously take off. Enough to attract content creators and VC funding to get it off the ground. In the end YouTube would probably win, but it would be after a few years of actually having to compete. The revenue loss over that time period isn’t worth the short term gain of getting some small percentage of users to watch ads.

If YouTube felt like it could get away with banning people using ad blockers and requiring an account to watch, they would have done it a decade ago.

Sure they have a huge market share. That's simply from being the first video-sharing platform and being from Google.
There is nothing unique or irreplaceable about them and plenty alternatives do exactly the same thing now.
Only better without ads.
Problem is there are too many and divide the small leftover market share between them.
When/if that's fixed people will not look back.
'normal' people choose VLC now and other FOSS.
YT is not their favorite sportsteam, they have no loyalty to them.
On the contrary. If someone insists on playing YT music for friends and it's interrupted by an ad, everyone's annoyed.
And content is shared on as many platforms as they can since it's free and they want as much viewers as possible.