Of course they'd err on the side of caution in this case.I think this is symptomatic of an underlying problem with the increasingly centralised Internet.
It used to be that if you wanted to share content online, you put it on your web site and others could visit. If it was infringing someone else's copyright and they objected, they would send a friendly message and/or legal C&D notice to you, and you'd probably all be sensible about things.
Today, ISPs don't tend to provide everyone with some basic web hosting allowance any more, while a tiny number of huge third party content hosts are making staggering amounts of money from redistributing others' content as a middleman. However, those hosts typically have no obligation to anyone to provide this service.
So all the small creators are making themselves beholden to businesses that see them as the tree that money grows on but are quite happy to cut off a whole branch if there's any fruit that might be rotten rather than risk spoiling the lot.
On top of that, a significant proportion of people are also uploading other people's content to the hosting services, but for some reason the hosting services get to have magic legal shields that mean they can be running extremely lucrative business models based in no small part on turning a blind eye to being accessories to infringement, all while offering debatable social benefits over what we used to have instead.
So I think "erring on the side of caution" is probably understating things. The hosting services would do almost anything to defend that legal shield and their business model, because as things stand the hosts are basically laughing all the way to the bank while mysteriously immune to the normal laws that apply to you and me and while having no real obligation to the people who provide the very content on which the hosting service depends.