I tried to be careful with a caveat, but you're not wrong. I think it's a good thing to chase and I hope Mozilla makes a stable long term commitment to it and doesn't expect instant results.
re: youtube, I really think it's a place where the fediverse is needed the most, and is unfortunately the weakest. I have seriously been considering something like an outreach campaign for niche categories just to build up the fediverse video universe (e.g. asking bands if they are okay with their live show videos being mirrored to fediverse, educational content, and maybe even something like a fediverse friday). Maybe a convo for another time but I think it's a huge issue where, unlike the browser wars, there's not even an obvious second best option.
So my take is that video hosting is pretty expensive and that it's hard to compete with Google because: (1) Google owns tons of fiber everywhere and has peering agreements with everybody so it has a better cost structure and (2) of course Google has a great advertising system to turn views into $ so (3) they can kick some money back to creators and still profit in a big way.
I have looked at the question of building something YouTube-like based on AWS where people could upload videos, they get re-encoded, hosted in S3, and sent out through CloudFront. It wouldn't be that hard and the system would be bulletproof and not require a lot of operational attention but it would be expensive... You could build something cheaper in terms of hosting costs but you'll pay it back in development and ops expenses until you get big.
And then there's the moderation issue: if you run an image hosting site people will try to upload CSAM and it's not hard to to enforce a no-ero policy but between that and hate speech and other problems who wants to deal with it?
re: youtube, I really think it's a place where the fediverse is needed the most, and is unfortunately the weakest. I have seriously been considering something like an outreach campaign for niche categories just to build up the fediverse video universe (e.g. asking bands if they are okay with their live show videos being mirrored to fediverse, educational content, and maybe even something like a fediverse friday). Maybe a convo for another time but I think it's a huge issue where, unlike the browser wars, there's not even an obvious second best option.