The point is that they shouldn't do it algorithmically. They need to have guidelines for what type of content is acceptable, and hire people to enforce them.
The rationale “we can’t make as much money as we’d like to if we followed the law” just won’t wash.
Citation very much needed.
They also need to not censor so much that it's a publisher and maintain themselves as a platform legally.
I don't think that that's preferable for society.
Imagine a YouTube that cost $10 to upload a video and $1 per comment. The quality of the content would be much higher and the hate speech would drop to zero. Wouldn’t that be preferable for society?
You're effectively restricting speech to the rich, and the poor just have to sit there and listen. That would be sad and unnecessary.
I create content for YouTube and if I had to pay $10 per video then I would never make another YouTube video again. It doesn't matter that there are thousands of people (and tends of thousands+ sometimes), because I simply couldn't afford to spend time and effort to make a video and then spend extra money to share it.
You could make the argument that perhaps society is better off if I don't create content, but there are at least some people that claim they enjoy it.
Isn't that basically Vimeo's business model?
Video classification by YT is a bit more tricky, since they themselves are one of the involved parties and thus any incentives put in place to improve the system would cost YT.
Google and company has no reason to not do the minimal acceptable amount. They aren't bound by morals, nor do they owe "society" anything. Shareholders also demand more and more profits, and so the result you see is the inevitable outcome, and it can't be any other way. Unless "society" wills it by voting in people who then make new laws to change the outcome.
To use a historical example, it's easier to moderate an IRC channel of 100 people than an IRC network of 10,000.
Usenet only fell apart because of the spam, and legal attacks by the RIAA and MPAA and BSA.
I found the moderated sci.* and comp.* groups more pleasant for asking questions and giving answers. The alt.* hierarchy had its moments, but mostly it was an exercise in tolerance. Some groups were largely self-moderating, others had such a poor SNR that there was no point putting the time in.
The RIAA/MPAA/BSA raids were only really relevant if you were into pirating copyrighted material.