I'm not sure I understand why that would be true. If all of the assets are on the server, why wouldn't the server send down a compressed view of the video?

It can do progressive sharpening too, so that e.g. if you pause the video you can see the full quality.

I agree that it's not ideal, but a lot of people would use it if the price was right. I would.

As far as the video assets being on the server, sure, it may suck to upload those. But people do (sometimes) upload HQ assets to youtube, so it's not unheard of.

If it takes multiple hours to upload footage, because upload speeds are generally horrible and not symmetric even on gigabit lines, I can definitely see that being a massive barrier.