2 reasons, but the main one is that they had to get separate individual licenses for songs or something and that was likely minimally cutting into their absolutely insane profits, but with YouTube music it's still just YouTube so only one is needed.. idk that's what I read on Reddit a couple years ago. The other is that their workplace culture is completely fucked and they push new apps instead of updating the old ones.
I'm not saying they should be like apple but sometimes seeing the killed by google list grow is frustrating when you look back and were an active user of a bunch of the things
I think you underestimate how expensive licensing music is. As an example, the vast majority of Spotify's revenue goes to paying licensing fees and is most of the reason they're wildly unprofitable