Right. Google are so open with their software and so non-discriminatory that they should be allowed to close their effective monopoly on their closed source online free video distribution website to competitors on business grounds.
In fact, because they're never evil, they should be allowed to prevent Windows Phone customers from viewing their friend's videos on YouTube via Windows Phone in a dispute that doesn't involve that customer.
If Microsoft released a silent update to ASP.NET that made it detect and return a "Error 600: Google Not Allowed" webpage every time someone viewed the site in Google Chrome, there'd (rightly) be an outcry.
For the same reason, Google shouldn't have released a silent update into their YouTube API that makes it detect and return an "Error 600: Microsoft not allowed" result every time someone tries to use a YouTube app on a Windows Phone.
Code should always treat everyone the same (up to authentication). Doing otherwise is explicitly "doing evil", undermines competition in the market place, is contrary to the entire principle of FOSS, in that it is narrow, centrally owned, hidden and subject to malicious "political" manoeuvres.
It doesn't matter if Microsoft used to be evil. What matters is that Google should aspire to be better. It's motto is "don't be evil" for heaven's sake.