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considering youtube is starting to add their own download links (http://www.downloadsquad.com/2009/01/19/youtube-begins-addin...) and there are already tons of sites and utilities to download them already that haven't been blocked, i'd say youtube doesn't really care.

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Do they care about the "youtube" trademark used in other domains?

For this reason, they should have instead named it pwntube.com

To many people (not really versed in internet culture) that would be pronounced [pawn/porn]tube, with the connotations such a name brings.

"Mom can I go on pwntube to get a video for my homework?" "WHAT?!?! PORNTUBE!?!? NO!!!"

;)

Perhaps... but who cares? I doubt the people that made this site really care about the hypothetical kid in your example.

who cares

Those who want their sites/products to go mainstream without ridicule (ExpertSexChange.com/ExpertsExchange.com is a popular example) or false negative impression/bias. This is why people often spend a lot of time to choose a name carefully, especially when you consider the long-term branding and marketing.

pwnyoutube.com claims fair use:

"PWN!" is a frequently used word on the Internet, the meaning of which clearly makes the words "PWN! YouTube" a parody.

Warning to folks who this is true: trademark and copyright law are different entities. There's no such thing as "fair use" for trademarks.

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