The main thing isn't that it's "intrusive" advertising (It is, I get it, but..) - it's valuable because it's targeted advertising.
When you were growing up - the most an advertiser really knew about you was that you were likely a child watching childen's programming. And then advertisers would run ads "for kids" during those blocks and that's as close as they could manage.
Now? Your computer and everything on it are spying on you. You don't just "watch" a Youtube video (or at least most normal people don't) - google knows who you are. They know what you were searching for before you came to the video, they're reading all of your advertising cookies, they know every video you've ever watched, they have access to your gmail, your gdrive, whatever else - it's a much more complete window into you as a person
You aren't just "a maybe kid watching a kid's show" you are "<Gender>, <Exact Age>, <Near Exact Location>, <List of Hobbies and Interest>, <Shopping for X items>, <part of X, Y, Z communites>, <Strongly Likes X games>, <Political Alignment>, <mostly everything else>"
Intrusive ads are garbage - but intrusive effective, specific, and targeted ads are extremely valuable.