>Any webserver will be happy to serve up .mp4 content. There are free players (JWPlayer for instance) and you are entirely free to serve up whatever you want from your own hosted service.
This echos the classic dropbox comment, "you can just do it yourself". A layperson isn't going to.
>That capricious decision can be appealed, you can take Youtube to court if you feel they have wronged you.
You can sue whoever you want, but you will lose due to lack of resources.
> Because it never was theirs in the first place
As the facebook controversies have show, people have a remarkably bad time using common sense and making rational decisions on the internet, so while you are totally correct, its silly to assume people think that way.