Yeah, storage and bandwidth are massive considerations and there's no way Peertube can handle it. And each channel running their own instance actually makes it worse, since you're going to have smaller entities who can't take advantage of deals that larger companies can make for hardware, data centers, bandwidth, etc. Plus, if you're having to run your own instance to have a channel, then you're not just focusing on creating videos for the channel, now you're also a system architect, sysadmin, etc. It makes it a massive barrier to entry, and one that only tech enthusiasts will even consider tackling.

But even say that happens: a bunch of people running their own instances for their channel. Where are they hosting it? Are they purchasing their own hardware? Running their own data centers? They're most certainly not running it out of their home. The overhead for that kind of operation is massive. What you'll end up with is a bunch of people running their instances on AWS or some other PaaS provider. And then you're right back to the problem you're trying to solve with a distributed service: that the service is consolidated on one platform (even if it doesn't appear that way to the end user). Sure, AWS et al aren't dictating the terms of service for your Peertube instance, but the instance is dependent on that platform.

On top of all that, you have the issue of monetization. How are you going to make money from your channel? Peertube doesn't have the kind of infrastructure of advertising etc. that YT has.

You also have another massive issue: legal. YT spent over a decade going through the courts with the MPAA, RIAA, et al fighting about copyright issues. Google has massive amounts of money and was able to weather that fight. But it's competitors didn't. Which is why you don't have Vimeo stars, for example.

Running a YT channel is a massive time, energy, and money sink. Add all of these other considerations to it, and it's an impossible task. It's hard to think someone would could see PT as a viable alternative. Google destroyed all of the competition (or let attrition do it for them), and pulled the ladder up behind them.