I have HD back on YouTube now
You have no idea how happy I am about this. But this wasn't something that was fixed on it's own. You see I also asked about this in Mozzila support to see if this was happening to anyone else or what solutions could be offered.
A user by the name of cor-el suggested I try this extension call YouTube Flashplayer. It apparently makes it so the videos can be tricked into playing on flash and not just HTML5. But the extension lets you switch back and forth between the two. Well as soon as I did that I could view videos on HD again and other quality settings that were available. I wasn't forced to view things on just 360. Had some slight trouble at first but everything is good now.
So I'm really glad cor-el was able to suggest something that helped. Because honestly who knows how long I would have ended up waiting/giving up because clearly this wasn't a problem that would have fixed itself in time.
Glad things are back to normal and now I'm done rambling on about this