Our 5 year old is obsessed with it and it really bothers me, for two reasons.
I'm talking about the YT Kids app.
For one the content is mostly garbage. It is primarily parents exploiting their children for hopes of Internet fame or monetary reasons and I really can't stand it. I don't want her to learn that being a spoiled brat or being showered with gifts is the norm. Beyond that the strange daddy finger remixes with strange spider man cameos are nothing short of disturbing.
Not to mention the creepy adult "hands only" videos where they basically just cover some popular figurines in play doh and unwrap them, endlessly.
We don't let our son watch it on a phone or tablet. He gets so sucked into it that he totally forgets about the rest of the world. The one way we found to compromise is to cast YouTube to the TV. Somehow, he's distracted enough by his surroundings that he doesn't turn into a little zombie like he does when he used to watch on the tablet.
Plus, we control what gets played.
If he is to use the iPad we use the app Cakey. You create your own play lists of YouTube videos so only videos you add can be seen. You can also download pre-made playlists by other cakey users.