Khan academy could have easily started with another video service. Archive.org had a free video service at the time I believe. There were others that took it's place when it shut down, including YouTube.
Not all video players are created equal. It's really hard to make a good video player. Case in point, look at all the crappy video players created by news sites that don't want to embed the YT player. Some can't even pause properly using the space bar or even let you select your preferred video quality.