The argument is that google uses integration between its own ad network and YouTube to outcompete any similar service. If anyone else tries to launch a video platform and sell ad space to google, which is likely given that google owns the world’s largest ad network, it’s in googles best interest to either give their own competitor an unfavorable deal or to completely lock them out of their ad marketplace.
If YouTube and google were forced to operate as independent companies it eliminates this conflict of interest.
I have a really distinct memory of finding a bunch of these in a friend’s house when I was a kid and every one was empty. After watching the TC video I think it’s more likely I just wasn’t pressing hard enough and had no way to know that. Anyway, I can see why they stopped making them.