And it's the user's prerogative to build and use tools to circumvent artificial[1] limitations.
[1]: reminder: technically, streaming isn't different from download, what your computer does when watching a video in streaming is downloading. Forcing users to delete the video they have downloaded (which is exactly what's happening with streaming) so they pay the premium service for off-line use, is not a legitimate way to do business. They can do it of course, if people are willing to pay for something they can have for free it's fine, but people who don't want to pay aren't doing anything wrong.
> Downloading Youtube videos, except with Youtube Red, is a breach of contract.
Too bad, then every single user of Youtube is violating this rule: the browser needs to download the video to play it, streaming is just the act of automatically removing the video chunk after it's played. I don't seen written anywhere that the user is forbidden to prevent the deletion of the video chunk he downloaded.
Even if Youtube updated its rules to fill this loophole, I would still be allowed to do it. In France people are protected by «l'exception de copie privée» which allow them to have their own copy of video or music which their are legally allowed to see/listen.[1] That's why we are allowed to record TV broadcast. I guess there must be a similar law in the US but I'm not really aware of the regulation there.
[1] sharing the video with somebody outside of your family is forbidden though.