Earlier quoted context omitted.
Let's not forget the time they refused to make a YouTube app for Windows Phone and when Microsoft made one, Google forced them to remove it. And then seemingly in retribution for making the app, Google blocked Windows Phone from being able to access Google Maps even though the browser was technically capable of using it. Google's reasoning was (similarly to another comment here) "it's too hard to check functionality…
Microsoft's YouTube app removed the ads. Violation of TOS. Pretty straightforward reason for wanting it removed. Don't act like Microsoft, of all companies, is some poor victim. They compete their ass off, and sometimes they win, sometimes lose. They lost that time.
I also remember something about how Google demanded that Microsoft implement something that wasn't technically possible at the time in order to get the Youtube app to be fully compliant. I don't remember what that was exactly, but I think it had something to do with how they were rendering the videos.
I was a Windows Phone user at the time, and was very irritated about Google being petty and not working with Microsoft to get the app working with ads.