Reads like an argument for breaking up Google, so they can't dominate and suppress markets by funding unprofitable units indefinitely.
I honestly think there isn't a good solution here. If Google didn't prop up YouTube, we would lose the utility of free* video streaming and hosting. Other than Google, it seems like the only organizations in the world with the resources to maintain YouTube would be far worse (i.e. governments).
This isn't to say Google shouldn't be broken up, but YouTube's existence is perhaps the best argument against it.
I would also break YouTube up, but that's because I think the death of free video streaming wouldn't necessarily be a bad thing.