These were the prices before YouTube really became big and were still the prices after they became big.
I've worked in video streamin industry in years and I haven't seen YouTube be the fault of the high costs. It mostly comes from the fact that videos are large, they need a lot of CPU power to convert and need a lot of bandwidth to transmit to clients.
As for CPU, storage - I don't think 10+ different formats at extreme compression are a hard requirement.
Youtube ads are good, as people will have incentive to use peertube and similar.
¹ You need some seeds, but they don't need Tbps pipes.
And a willingness to steal...
It's illegal and if everyone did it, movies would not exist.
If everyone that wouldn't have paid pirates a movie then nothing bad happens and people enjoy things.
Arguing one of those facts while ignoring the other one is a mark of a bad argument.
You can't just assume that people that don't use your service would be paying customers if a specific alternative wasn't there.
Personally, I don't consider it a valid point.
It only costs so much to share some data because of massive centralization by the likes of Google and ISPs, and can only be sustained because of t sustained because these "subsidies" from large players. It's not technically hard to distribute some videos efficiently, but the market is less than 1/10000.
Maybe in 5 years it will be near impossible to host a web site without being DDOS-ed, but I won't praise Cloudflare for their now-possibly-not-free service, I will blame them along side ISPs.