The passage you quoted doesn't call for anything closely resembling YouTube's current system. All it says is that YouTube (where YouTube is standing in for any

The passage you quoted doesn't call for anything closely resembling YouTube's current system. All it says is that YouTube (where YouTube is standing in for any provider) has to be open to banning repeat infringers, and can't claim DMCA protections if it tries to stop content holders from identifying their copyrighted works through software that is the product of "an open, fair, voluntary, multi-industry standards process." In the context where the DMCA was written, it seems most likely that they were thinking of, say, Napster banning known copyright enforcement agencies in order to prevent them from scanning its network.