In both of those cases, I don't see how this is Youtube's fault or decentralized hosting would be better.
In the first case (uploader wants it gone) you have a sticky situation where loosely managed websites refuse (or can't) respond to requests to remove, which can start interfering with various laws in various places.
In the second case, where IP has been violated, those same loosely managed sites run significant legal risk of lawsuit by not responding.
From the perspective of a content owner or video creator, why would you want your work decentrally stored in places that you can't control it?
The other angles here have to do with monetization, too. When you use youtube, you can serve user aware ads and track who is watching your video as it spreads. If it is self-hosted, your content has been stolen and is enriching someone else illegally.
From a creators perspective I can't see how decentrally stored videos would be good.
Perhaps what we need is a Library of Congress type organization to begin a serious long-term archive of significant portions of this type of media.
I agree with you on the Library of Congress. We need a digital LoC.
The only sites safe would be those self-hosting, and those wouldn't be able to serve a lot of bandwidth without having the means to be sued.
If it wasn't for YouTube, most of those videos never would have been embedded in those pages in the first place. If the situation you describe was in any way feasible, people would have done that in the first place instead of using YouTube. You're asking for an imaginary free lunch type of situation.
Yeah--there weren't very many videos because most web hosting services didn't let you consume that much hard drive space.
That being said, it's a net-positive when it comes to content created. The internet wouldn't be as crazy without YouTube, so thanks for that.