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Google admits it's making YouTube worse for ad block users
(www.theregister.com)
This is a most excellent place for technology news and articles.
You are correct. Fundamentally, it's the hosting and storage issue that's the crux of all this.
And the only choices available are another corporation hosting and paying/passing on the cost, or all of us hosting on a peer-to-peer network, which will be slow, but doable.
Having said that, the peer hosting method would work though, and shouldn't be dismissed out of hand. We just shouldn't expect the same level of service we do from YouTube or any corporation hosting videos.
I mean torrenting works but i'll be damned if I'd need to wait for the buffer to fill up every 30sec for the 1440p video.
You'd need multiple versions pre-encoded to reduce network transfer and serverside transcoding.
It would definately be a slog to watch, vs a service that can just deliver the video to you in real time on demand.
My only point is that you would be able to watch the video, after the slog, so that avenue should not be discounted as an option. Its not a great option, but still, an option.