That's basically what PeerTube tries to do. It doesn't work well in practice for most people and organizations that try it because most videos only have 0-1 watchers at a time.
YouTube can afford to offer a lot of value to the customer, much more than it would have been able to sustain by itself without the Google support.
Without offering all that value, definitionally, Youtube would not be as attractive to consumers.
Therefore consumers would be more likely to choose other alternatives like PeerTube
Therefore projects like PeerTube would have more support and therefore would develop more quickly.