I disagree. You are mixing together two categories: legitimately bad content (like the scary kid videos) and content does not fall in line with Google's political stance. As an advertiser you are targeting a very specific narrow population anyways and it is super easy to exclude your ads showing up in videos that you do not approve. And just a counter example to your point:
Why is the argument silly? Any "solution" to this that I can think of would be awful.
Let's throw a counter example on another platform. Most American talk radio is conservative. (https://www.forbes.com/sites/abrambrown/2015/07/13/why-all-t...) IMHO the reasons for this are largely demographic oriented as specified in the Forbes article -- consequently, liberal specific talk radio has not done as well as a business model since, say, the 1980s. Conservative specific talk radio has.
It's pretty easy to Google grumbling from liberals about Clear Channel being conservative and crowding out liberal talk and whatnot. These arguments seem as silly to me as the arguments about the political stance of Google (which I also think is more driven by business dollars and cents, not explicit political lean).
At any rate, what's the solution here? Force Clear Channel to host liberal political talk via government decree? That would be about as awful as forcing Youtube to monetize conservative videos via government decree.
The only arguments that make sense in this direction to me is that American radio, in effect, is a monopoly. It might be difficult to start a "liberal specific talk radio" format even if there was a solid business case for it, because the airwaves are dominated by only a few corporations. (I would argue that this actually played itself out more in the world of music -- a lot of music never crossed into the playlists of corporate radio or MTV, because of various reasons. Which is why Napster was so heavily embraced by many once it showed up.)
Likewise with Google / Youtube: I would be much more receptive to arguments along these lines. If they became a defacto monopoly (I don't think they are there yet, but this is a danger these days), only one "content policy" would exist. And that definitely would be a problem.
Hence why I think the real issue here is keeping the web open and competitive.
https://www.nbcnews.com/tech/internet/facebook-halts-potenti...
This was in production for god knows how long.
"Feel free to start your own video platform that doesn't have Youtube's current corporate advertisement pressure."
Well I do not use Youtube as much as I can. I use alternative video content providers. Anyways, this argument is silly at the very least.