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It's not an unreasonable suggestion. The reason YouTube has this filter in place is because their business model does not allow them to handle the issues with humans -- likewise for the complaint form Jeff filled out.

Thus, while YouTube eliminates overhead, it exposes you to mistreatment by algorithms. If this tradeoff is a problem, hosting the file yourself is a viable alternative.

Why should video be any different from images? I wouldn't consider putting my sites images on imgur, why should I put videos on Youtube?

Because simply "the point of a video sharing site is so you don't have to worry about the overhead of transcoding, building a player, and distributing/debugging your videos". Video formats on the web aren't as standardized as images, at least till html5 catches on, and then there is again a controversy bt. webm and h264.

Well yea it's easier, but if you don't agree with YouTube's fair use policy it's really not that hard to host it yourself. There are tons of swf players out there.