The system is a CYA policy for YouTube. It wasn't designed for that. Copyright holders just saw it as an opportunity to abuse a system for some extra cash. The lawsuits would be unlikely to hold up in court.
Those 1.4 millions drivers aren't all driving at the same time. They would only need a fraction of that many cars and they could be built over an extended period of time.
You only quoted the first half of their sentence. They said duplicate apps are only an issue when you aren't allowed to remove the one (or both) that you don't use.