First it will be a back and forth war of Anti-adblockers vs Adblockers
Then when the Anti-Adblockers start to lose, which they will, then they'll come crying to various governments with massic PAC campaigns among other insane garbage about how "Adblockers are Piracy!" and that they need to be banned.
It'll end well enough. People will just stop using their shitty platforms. They'll start looking for alternatives, from which there are loads, find that there are platforms that don't require ads, and go there.
You're massively overestimating the conviction of the average internet user. They'll do whatever they're told is cool to do, including visiting a site that is nothing but ads.
The closest thing I've seen is lbry, where some creators have mirrored their YouTube accounts. But it feels like a very small number of them uploading there.
E to add: As with all alternative platforms, it's also home to a lot of content that was kicked off of more mainstream platforms for one reason or another.
TILvidsis a peertube instance with a focus high quality educational content. There is vastly less content compared to YouTube but the videos that are there tend to be really good.
Eventually they will just use server side authentication that the ads were displayed properly and the best an adblocker can do is draw a grey rectangle over it and mute your tabs sound.
The thing is, if they get really stupid with it I could just go ahead and install pi hole. I haven't already because it's a bit of a fiddle on and I don't apparently don't need it yet. There's no way for the government to mandate against that, unless they actually want to ban me from owning a computer, Which obviously won't really work.
That only allows DNS-based blocking of domains, which isn't going to be nearly as effective. A lot of modern ads are served up from the same domain that you're visiting. Browser-based ad-blocker extensions are in a position to block domains, URLs, and specific parts of the HTML DOM itself. This is going to sound rude, and I'm sorry in advance, but when people bring up pi hole, I assume they aren't very knowledgeable about how things work.
Pihole was once a good adblocker, but as more and more websites realize ads being served from an external domain are easily blocked, they too push their ads through their own domain.
Pihole is still good for some pages, but mostly, its useless as an adblocker.
I have 2 piholes on my network, mostly useless they might be but both block over 20% of the traffic, ublock origin and Firefox take care of the rest. Are you sure you set it up correctly?
The internet access on my network is much more varied, 12 clients including work laptops, an HTPC, Unraid server, smart TV, phones, watches, tablets, games console, VR headset. Several of these use VPNs so bypass the piholes, I used to see up to 45% a few years ago, but I see no reason to switch them off just because other systems are taking up the slack. Seriously, I can't remember the last time I saw an ad.
Setting up a pihole takes minutes, and will block literally millions of ads on your home network.
The biggest hurdle is teaching yourself not to click on sponsored links. Google will still show promoted results, but you'll get an error when the pi blocks them from loading. This is annoying for new users, especially if some of the users don't care that they are being manipulated and just want to see the thing google wants to sell them.