I'm sure YouTube also gives back all of the Google ad revenue generated by those videos, along with the MP3 sales generated by the links to Amazon and iTunes. Wait a minute - of course they don't! Why would a big business like Google follow it's own rules and ethics?
It reminds me of a story I read a few years ago about a guy who robbed a local pizza shop, who then took the money to a casino and gambled it all away. Technically (and legally), the casino was accepting stolen property (money) and should be forced to return the money to it's rightful owner. But how did the case turn out?
After the case went to court, the judge didn't see it that way - he let the casino keep the money and told the pizza shop owner he was out of luck. Of course, if the thief took the money to a car dealership and bought a new car, going by the judge's logic, the dealership could keep the money and the thief would have a shiny new car waiting for them after completing the jail sentence - and the pizza shop owner would still be out of luck. But in reality, the judge would order the car returned to the dealership and the cash returned to the pizza shop. So, how are the circumstances different for the casino? Why do they get to keep the money when it should be returned to the pizza shop? Only the corrupt and immoral judge knows the answer.
In the end, Google and YouTube make money on both legal and copyright infringing videos, no matter what. They host the illegal content, yet somehow stay out of the legal entanglements; plus profit from the activity at the same time. What a sweet deal! I guess it really pays to be a huge corporation, loaded with billions of dollars (protected off shore) and that plays by their own rules.
No wonder Google dropped their slogan of 'don't be evil'.