The only way this could really be considered to have backfired is if people were stopping using YouTube entirely, which isn't really happening.

I wouldn't even call that backfiring. If those people were using ad block, how much were they contributing to YT anyway? Watching videos doesn't get Google anything besides server costs unless they manage to sell an ad to that user. You could argue usage statistics help them, but they have no competition to way that against either so even that is moot.