It's YouTube's users who are the nannies
Actually, the decision to "X-Rate" YouTube content is made by the community at large, not YouTube management. Every video has a link below it marked "Flag as inappropriate". Anyone clicking this link adds a flag to the video; if the video accumulates enough flags, it gets rated as inappropriate and you have to sign in to view it. The video is not censored at all; the only difference is the required sign-in.
So this is more the prurient sensibilities of the YouTube community, with people from around the world flagging content as inappropriate. Given the strong presence of religious elements in that community, it is not surprising that any video showing genitalia gets flagged, regardless of its motives. Censorship begins at home; when the do-gooders, curtain-twitchers and religious freaks get together, it bodes ill for everyone else on this planet.