Read the article, youtube is apologising to the 3rd party who is neither the label nor the infringer but THE FAN who wanted to view the video. It is not justifying anything, it is simply saying "Hey, you wanted this content, we don't have it anymore, sorry."
As with all these idiotic "Think of the children!" moral panics if less time were spent focusing on the censorship and more time spent on proper parenting skills then this issue would resolve itself fairly quickly.
Competition is good for the consumer, but bad for AT&T. I never assumed for one minute that Mr Stephenson actually cares about consumers beyond whether they are paying his company rather than a competitor.