It's about control. As a user agent, youtube-dl acts in our behalf in order to do what we want and protect our interests. That's why they hate it. It's the antithesis of everything they want: something that acts on their behalf, does what they want and protects their interests.
If something gives us any power at all, they'll sue it into oblivion.
If something gives us any power at all, they'll sue it into oblivion.