> people use ad blockers, making the websites less money, so they add more advertisements for the people who don't have ad blockers
I have serious doubts about this step in the spiral. IIUC, people who use ad blockers are still vanishingly few, and therefore the loss of ad impressions should not be that large.
It's clearly enough of an impact for Google to spend effort killing uBlock on Chrome, and (attempting) to block it on Youtube. Obviously Google is huge, and even a small percentage of users is still a lot of money on the table.
We can only draw the obvious conclusion: Namely that Google plans to introduce a lot more ads once they have an iron grip on the consumer. If Google did that before Google destroyed ad blockers, regular people would indeed start to use ad blockers.
That's possible, but I think it's premature to think this is part of some grand plan. What likely happened is that Google estimated the cost to fund a team to shut down ad blockers was less then the money they were losing from ad blockers. Maybe it's part of a larger initiative, but I'd be hesitant to assume that without more evidence.
Remember that Google has established a pattern of hiding their true motivations so well that even lawyers can't find them (internal chats "off the record"), and they're in trouble with the law as a result.
Some sites have a message like "hey, we can't serve you ads, you must be using an ad blocker, stop that and absorb the advertising as is your duty because we need the money". But maybe that's just desperation and they aren't losing much to ad blockers anyway.
Many people believe that the loss is great, especially web site owners, which would certainly explain such messages. But lived experience shows at least me that most people don’t even know what an ad blocker is.
I have serious doubts about this step in the spiral. IIUC, people who use ad blockers are still vanishingly few, and therefore the loss of ad impressions should not be that large.