A little backstory: Google does not make the Windows Phone YouTube app like it does for iPhone and Android. Instead, Microsoft makes the app and taps into YouTube’s developers tools to pull in videos to your phone.
But Google and Microsoft have had a lot of back and forth recently over the way the YouTube app for Windows Phone works, with Google occasionally blocking videos from playing. Microsoft then fixes the app, but Google finds another reason to block videos. And so on.
Obviously, the best solution would be for Google to make its own YouTube app for Windows Phone, but that would mean helping out its rival Microsoft. And the Windows Phone platform doesn’t have enough users to make it worth for Google to spend all that time to serve pre-roll video ads to a relatively small audience. Google is much better off focusing on the massive number of users who own iPhones or Android devices.
On the flipside, Microsoft is doing most of the work for Google for free here, so it seems quite petty to block the YouTube app on Windows Phones.