However, the business problem raised by mooism2 -specifically, revenue streams, and covering costs - have visible consequences, in that the vast majority of content producers would opt not to pay for distribution of their content.
Also note, that youtube was never built to generate revenue -it was specifically built to flop to one of the big players.
In short, to consider this as an opportunity, you need to radically innovate on extracting alternative revenue streams from viewers, producers, or third parties.
For puppies videos, I think you can't (and don't want) beat youtube.
That said, video hosting is expensive, very expensive. Especially at the scale of Youtube. How do you propose that they should earn money? Ads is a damn good way of doing it, especially when you got the massive advertising organization that is Google backing it.
What costs need covering?