I'll guess that longer term free video will be distributed via some p2p system. Torrent-like capabilities will be transparently integrated into players, the kinks will be worked out and video will be smooth, and free sites for reliably indexing and distributing the "torrents" will emerge.
I doubt youtube is viable long term. They are popular because they hand out free bandwidth and storage, and have lots of copyrighted material. Youtube will be pointless once it's as easy to post a video as it is to stick a picture somewhere online.