
RIAA has a point there, unfortunately
Y'all are missing that the stupid, stupid developers handed RIAA the sword themselves.
The crux of the complaint are these tests (and similar ones): youtube_dl/extractor/youtube.py#L581-637
'note': 'Test generic use_cipher_signature video (#897)'
'note': 'Test VEVO video with age protection (#956)'
'note': 'Embed-only video (#1746)'
They test that youtube-dl could still decode DRM-protected content, circumvent age restrictions and download content marked "embed-only".
It's hard to argue that youtube-dl was developed for benign, legal purposes if it contains code that verifies that the illegal purposes still work and do so by downloading copyrighted material. If only they'd used their own test videos, RIAA would have needed to find a better attack surface. With the code as it is, there's little defense available. OCD coders dumped this fail on themselves.
Most of the youtube extractor code will have to go, I'm afraid, with unit-tests added to verify that it would only download Creative Commons licensed, unrestricted content and no future change accidentally "breaks" that feature.