Hello,
Welcome to Adobe Forums.
Did you select the quality of the video HD720 in youtube widget properties dialog box?
Is it happen in a specific project or all of your projects.
Did you try to use the same URL in blank new project ?
I have tested a sample video and it preview perfect in hd720 mode.I have checked your video as well and it looks like the video itself is blurry not cleared.
Regards,
Rajeev