The state of YouTube recommendations is absolutely terrible, I wish it was possible for someone to build a third-party recommendation system to compete with them. The most frustrating part of YouTube recommendations is that it keeps suggesting videos I've already watched, and which I'm not interested in the slightest in rewatching. It reminds me of years ago when Amazon would recommend more of the thing you had just bought.
If I add something to my Watch Later list, it keeps recommending that video, but it never surfaces older entries.
Recommendation systems in general feel so limited in how much user input they allow as well, I wish we had more knobs to twist. There's definitely whole categories of videos and content that I'd love to blacklist.
It definitely feels like an area with potential for improvements and optimization, but I'm not sure if YouTube's APIs are sufficiently flexible for anyone to build a competitor. And even if you could build a competitor, it would probably end up getting shut down or incapable of being monetized.
Something cool about Blue Sky is that they actually allow you to build customized algorithmic timelines. You're not locked in to a single opaque recommendation algorithm. Would love for this feature to be available on YouTube.