youtube.com doesn't have any obvious method of removing of past watched videos and is even more nefarious than Google will probably ever be (before March 1st, 2012 at least) about tracking visitors.
Additionally, YouTube has become pretty much just a branch of the RIAA and MPAA and their local equivalents, and I'd rather burn down my house than allow them access to my data.
That's why I've been blocking YouTube from setting cookies on my computer, and that's why other people should do too.
I am not saying that the average user knows about them, though, but they're not that hard to find.
(Also, since you seem to talk about YouTube and Google as separate companies: They're not. Google owns YouTube and their new policy applies there as well.)
Additionally, YouTube has become pretty much just a branch of the RIAA and MPAA and their local equivalents, and I'd rather burn down my house than allow them access to my data.
That's why I've been blocking YouTube from setting cookies on my computer, and that's why other people should do too.