I think the problem here is that YouTube alone isn’t profitable. I think the only thing keeping it going is as an additional vector of ad placements for Google. YouTube is an extremely expensive service to run as well. No one really has a chance to compete with the sheer volume of content and inertia of YouTube.

What I would like to see instead is a return of self-hosted videos from creators’ own websites plus a site like YouTube that is really just an aggregator of those videos. That way you can also have smaller businesses that provide YouTube-like services for those that don’t want to self-host, but those videos still get included in that aggregator. I think that would be the best ecosystem for competition.

However, I have no idea how feasible that is. It’s just an idea that came to mind.

Just /s/YouTube/Peertube (a federated video host) in your second paragraph, and it turns out to be a thing already:

"What I would like to see instead is a return of self-hosted videos from creators’ own websites plus a site like Peertube that is really just an aggregator of those videos. That way you can also have smaller businesses that provide Peertube-like services for those that don’t want to self-host, but those videos still get included in that aggregator. I think that would be the best ecosystem for competition."

You’re right. PeerTube is sort of what I was imagining. Thank you for mentioning it.