This form of revenue generation / business didn’t even exist before YouTube.
The point is that advertisers essentially decide what's permissible and what isn't. An alternative to youtube backed by advertisement from major brands would have to abide by the exact same model.
On a more pragmatic note, the reason people use YouTube is because everything is there. Competitors like DailyMotion and Vimeo exist and do compete, their content libraries are pretty pathetic though, and the advertising situation is no better than YouTube.
It's a cute thought, but how? If say, Amazon decided they wanted to use their AWS infrastructure to immediately start funding a more cost-effective, better version of YouTube, they still wouldn't have the monetization inroads or content catalog of YouTube. Twitch puts up a hell of a fight, but YouTube operates on another echelon.
IMO, the solution will be P2P on-demand streaming services, something akin to IPFS or BitTorrent. No other competitor should eat YouTube's lunch, because that just puts us back under the same wheel of censorship. Or (hint hint - this is most likely) nobody will care, and the status quo will continue to exploit millions of people for billions of dollars because Money Good!
It's hard to beat YouTube if you want a site that has free uploads, sends you views for free, and might even pay you for it. If you don't mind paying then there's other CDNs out there to host your videos, but you need a CDN to get cheap fast bandwidth.
That's changing, at least I hope. Fiber is usually symmetrical and is putting pressure on other companies, and DOCSIS gets closer to symmetrical with each revision.
Once you have 50-100Mbps of upload, you won't even notice the bandwidth use from sending video data back out while you watch.
I mean, I could make a similar argument about how if a video is only on one server you hit a breaking point.
But also serving leeches is a different problem from the actual p2p network. There are different considerations and fixes.