What?? A US company says its governing government takes precedence over any other government's laws?? What shock is coursing through my body at this very instant for the insanity that a corporation must follow the laws of its home-base government!
Stop using US companies, if US laws go against your country's laws or your ethics.

It likely costs them less to upscale than it does to store and serve a full sized video, so they're not giving the uploader the choice.