People are upset about Spotify trying to own the podcast market. Meanwhile Web video is already in the position everyone dreads podcasts reaching, and has been for its entire existence. Assuming folks aren't wrong about RSS-based host-anywhere podcasts being better than having the entire market controlled by one provider, seems obvious video'd be better with the same model.
The why is obvious - the bandwidth involved isn't quite so hospitible to small scales as podcasting. Either we need to revive Moore's law or start flogging electrons and photons for not going fast enough.
I know (believe me, I know) that bandwidth is expensive, but I'm also pretty sure YouTube's margins leave plenty of room for competitors to come in with less-effective monetization schemes and still turn a profit. There's no reason a host couldn't put ads on videos hosted under some kind of free tier, after all. I'm quite sure we wouldn't end up with no free hosting. Worst case, I think it'd tend to be quality capped to SD-quality or something, and that's worst-case.