He wasn't in a position to co-found youtube, not to mention there were already plenty of video sites around before and during youtube's rise to prominence.
It's a classic case of "well I had that idea I could of done it" - doing it is 99.9999% of the exercise, having the idea is 0.0001%.
Given the current state of copyright law it was pretty much insane for them to expect to be anything other than a lawsuit magnet; unless they had a plan to deal with it.
In other words, just because they sold to Google, doesn't mean other companies didn't also offer money that would have made the founders millionaires multiple times over if they had accepted any buyout offer in the previous 6 months to a year before that. Most any startup that sells for millions or billions of dollars didn't just accept the first buyout offer they got and it happened to be for a lot of money; no, they had been negotiating and evaluating serious offers from day one, all the while improving their software for months or years.
Remember the days before flash video? Remember having to use quicktime and realplayer? Those days sucked.
YouTube democratized online video. The founders may have been at the right place at the right time with the right execution. However, do not discount the fact that YouTube's founders came from PayPal. I'll try to find the link later but in an interview one of the YouTube founders said being on the ground-floor at Paypal and watching them build the runway for the company to take-off inspired them because it made them believe it was possible.