Is it because it would break compatibility with some devices? Is it too expensive?
(not that I'd like that; I always download videos from YouTube for my personal archive, and I only use 3rd party or modified clients)
Sooner or later, in the next couple of years, it will happen.
This is a significant part of it. There are many smart devices that would not be capable of running that sort of software. As those cycle out of the support windows agreed way-back-when then this sort of limitation will be removed.
I'm sure this is not the only consideration, but it is certainly part of the equation.
People underestimate how much engineering Netflix have put in over the years to get it to work seamlessly and without much playback start latency, and replicating that over literally millions of existing videos is pretty non-trivial, as is re-transcoding.
It's not because of older devices - any TV that has got a YouTube app for a decade was required to support Widevine as part of the agreement to get the app, so the tail end of devices you'd cut off would be tiny, and even if they wanted to keep them in use you could probably use the client certificate to authenticate them and disallow general web access. It wouldn't be 100% fullproof but if any open source project used an extracted key you could revoke it quickly.
Major platform like Netflix etc. don't implement that DRM since they care, it's because they content they distribute requires that they employ that measures, otherwise who produces the content doesn't give it to them. Content on YouTube does not have this requirement.
Also: implementing a strict DRM on all videos is probably bad for their reputation. That would restrict the devices that are able to play YouTube, and probably move a lot of content creators on other platforms that does not implement these requirements.