Google handles this in the same way as Netflix by living in your ISP's data centers. Google has an edge global cache that can live at ISPs to reduce bandwidth usage.

https://peering.google.com/#/options/google-global-cache

Google and Netflix can do this, because ISPs have to let them host there to avoid massive burden on their network. An individual who wants to host their own videos cannot. So, as Sir_Cmpwn indicates, some sort of torrent-esque system is needed to let individual users have some sort of option that avoids crazy bandwidth costs.

Does torrent or any other protocol out there try to prioritize peers that are within the same ASN or something similar? Many protocols ignore the physical network, but here it seems like it would help to be smarter.

There's no need for manual priorization for nearer ASN's on BitTorrent, as is this builtin implicitly by prioritizing faster connections with higher bandwidths automatically. If a faster connection exists in a different ASN, the faster one is prioritized. Nuclear proof dynamic design, similar to TCP/IP.

Huh, this is a really good question/idea.

I heard that BitTorrent is 40% traffic of today Internet