I previously mentioned that if video was just a 9mb file on someone's website, like a HTML page or GIF, it would kill YouTube. I'm not sure about the bandwidth requirements for the more popular sites, though.
video/image hosting is not the point, it's community that counts here: youtube is just a vehicle to deliver your video to more eyeballs, because poking around youtube is easier for the joe user, rather than poking around the 'net. also, as others have pointed out, bandwidth is cheaper for google rather than for the private VPS that hosts your site.
