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People will find alternatives. You can’t stop people witj adblockers from using YouTube by blocking adblockers - no more than you can stop piracy. People just build better, more resilient ways to bypass things. This decision has good understanding of business but not psychology.
The only real way is to make it more convenient to use YouTube with ads, so no one goes for adblockers anyway.
They absolutely can, and I suspect the day is coming soon when they do.
Instead of simply putting ad breaks in the video, they’ll be able to splice in a few ads to the video and re-render it to include ads each time someone clicks on the video.