Google could use HTML storage https://developer.chrome.com/apps/offline_storage, like MEGA does, and temp store played videos. I suspect either nobody bothered because its not as glamorous as inventing more idiotic UI "improvements", or someone ran the numbers and came to the conclusion saved BW is minuscule compared to potential support issues (maintaining code, bugs etc). Not to mention Offline means Google cant sp^track you.

I played with this idea, custom extension rewriting ://.googlevideo.com/videoplayback?* webRequests, redirecting to my local proxy server, but in the end it was more trouble than its worth, instead I just have "download with yt-dl" button right under the videos I intend to watch multiple times/later/offline (https://github.com/raszpl/smplayer4YT).