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No it isnt, because if i try to play a video 7 times, it will work about 2 out of those times.
There are workarounds some people have found like:
1) instead of directly tapping the video, if you press the "i" which shows its related videos and allows you to view comments, rate, favorite, share, flag. It seems to work more often than just directly pressing the video from a search.
2) When getting the "Sorry this video cannot be played" error, if you press the back key, then press the search key on the phone, type in a bunch of letters then delete and press back key, go to the video and it plays more often than not.
3) when using m.youtube.com the video will play
Also want to add this happens with almost every video.... and if the uploader even did deny mobile phones, it would even show up in the search when using the app
One more thing.... the videos play flawlessly while on wifi... issue is only present when on evdo (3G)