However, in principal I do think users should either pay for the content they watch or watch the ads and wish that it were possible for youtube-dl to include these ads in the resulting video so it were more akin to the vhs example. That would also have the advantage of reducing target advertising since you only know who downloaded a video, not who is actually watching it. Much easier to just run youtube-dl from inside a VPN and make youtube-dl relatively anonymous than trying to make your entire browser anonymous while watching YouTUbe.
Yes, users can skip ads with the above system, but apparently skippable ads work on traditional TV with DVRs and VHS and also work for content creators who take sponsorships on YouTube.