As for the Let's Play situation, it wasn't YouTube blocking anything at all. YouTube did not claim copyright nor create the blocks; it was other parties claiming copyright and enforced through ContentID. The Let's Play people claimed it was fair. Various groups, including Nintendo and several music organizations, claimed it violated their IP. YouTube followed policy. YouTube's current policy is that in case of continued dispute that goes through counter-notifications or DMCA take-down, the content gets removed until both parties deal with out outside their system. It isn't that YouTube is blocking anything, instead following their policy that they are not a legal mediation service and their "safe harbor" provisions in the law mean if there is a dispute, the best action available is to remove the content until the other people resolve the dispute externally.
I felt Nintendo was given an unfair amount of bad PR for that.
Google, trying to proactively figure out the copyright issues around Let's Plays, contacted Nintendo with a Google's idea of something that Google thought would be fair for everyone. There are four people involve: The distributor (Google), the license holder (Nintendo et al), the video creators (Let's Players), and the consumers (the public).
Google has always taken a cut of the ad revenue, but they were trying to figure out a way to give the license holders a cut, to proactively protect this new industry from lawsuits. This is good and desirable.
Google contacted Nintendo, offering a share of YouTube revenue from Nintendo-related properties. Nintendo said, "You're offering us new streams of revenue? Sure!".
The video creators, however, would have had their slice of the pie shrunk to give the license holders a cut, and ofcourse nobody wants their revenue shrunk, so they protested over it.
Nintendo was caught in the crossfire, and since they were invited into it, didn't have a plan, and so were reacting to the outrage without thinking things through, likely compounded by the language barrier and culture barrier. It wasn't Nintendo of America, but Nintendo itself (Nintendo of Japan) that makes these decisions.
As part of Nintendo's reactions, they fired off copyright claims against Let's Players... because, you know what? The Let's Players are violating copyright laws.
This is similar to the stupid amount of controversy around Valve's 'paid mods', except that a different group of people (the public) got up in arms because their unfairly large slice of the pie got worse. It didn't help that the license holder (Bethesda) wanted an unreasonably large slice as well.
If someone gets something for free, they don't ever want to get it for "not-free", no matter how fair it is.
If someone is making 100 units of currency, they don't ever want it to decrease to 75 units of currency, no matter how fair it is.
You have to look past the outrage, and look at the larger picture to figure out what's actually going on.
It's be great if a new copyright system included things like Let's Plays as protected work, and mandated a small, reasonable, fixed percentage of revenue to go to the actual license holders. Basically, a compulsory license + mechanical license for Let's Plays, such as already exist for music covers and radios playing music.