First, on a practical level, no one wants to deal with hosting anything, let alone "civilians", so billions of web servers on the edge of the network is simply a no-go unless and until doing so becomes appliance-esque (which will necessitate provisioning of backups and failover using...wait for it...third party services that could only exist given safe-harbor provisions.).
Second, 99% of users and cumulative usage time is spent consuming, not producing stuff.
Third, this is just crazy:
"""The online content farms profit based on the fact that it's hard to share your own content, yourself, via a means of production that you control. This is the central fact free-speech activists should be upset about."""
There's oodles of places to go that will host your stuff far better than YouTube et al. can, but most people don't care enough to pay for it. Go to vimeo, pay whatever trifling sum they charge these days, and you'll have all the control you want, a better experience to boot, and all the free speech you can muster.