YouTube was not profitable for quite some time, just like Reddit and Twitter have been struggling with. They have massively increased their advertising and data collection over a number of years, decreased the cut paid to creators, and become more and more exploitative of user data, so at this point they now account for about 10% of Google/Alphabet's total yearly profits. While I have not seen an ad in years, I have been told that ads have become unskippable, multiple ads play consecutively, and there are numerous ad breaks throughout the video. The last time I saw an ad in YouTube, everything was skippable and ads were basically only ever at the beginning and end of videos, where creators actively wanted them. Now they are apparently incredibly intrusive and disruptive, and I'm under the impression that content creators can't even choose when they show up in the video.
YouTube enjoys an almost complete monopoly, and that isn't going to change anytime in the near future. The infrastructure costs for another company to develop a similar platform would be immense, and getting people to switch from YouTube at this point is practically impossible on both the content creator and viewer side. YouTube massively underpays its creators, and they become more and more anti-consumer and anti-creator every year. It seems they are even moving to ban in-video sponsorships in the near future because they don't make money off of them.
The only open source alternatives I am aware of that have any amount of scale are PeerTube and Odysee, neither of which come anywhere close to rivaling YouTube. I personally wouldn't worry about your decision affecting YouTube's profit margins; very few people even try to block ads, and even fewer use alternative frontends like NewPipe, Invidious, or Piped, so YouTube's profit margins will be determined by the complacency of the general masses anyway.
If you'd like to get into the ethics discussion of whether or not YouTube should profit, I'd be happy to provide my justification as to why I'd love to see Google/Alphabet as a company die. They exist solely to exploit their userbase for profit, and I don't believe that to be justifiable. But that conversation is practically irrelevant, as your decision as a single user has no realistic impact on YouTube's profits anyway.