So I just noticed that while using the Chrome privacy extension "Browsec", a Youtube video would play incredibly slow

Yet, when I turned Browsec off, the video fully buffered in a few seconds.
Is Youtube doing this intentionally to encourage people to stop using IP encryption tools? Or is it something to do with the technology itself?

It’s a shitty free VPN extension, what do you expect? Of course it’s going to be slow, it probably inserts ads, they’re likely going to collect your data, sell it and maybe even sell your bandwidth like Hola.
I recommend you read the /r/VPN sidebar and wiki.