Well, realistically there is a good chance that this will turn out just fine business-wise. They don't care if they lose some engagement or if the quality goes to shit. It's all good, as long as it makes some money.

In my opinion, this sort of model should be considered anti-competitive. It has become apparent that these services operate on a model where they offer a service that is too good to be true in order to kill the competition, and then they switch to their actual profitable business plan. If you think about it, peertube is a much more sensible economical model with its federation and p2p streaming. But nobody has ever cared about it because huge tech giants offer hosting & bandwith "for free". The evil part of youtube is not the ads, its the fact that it allowed us to bypass them long enough for the entire planet to become dependent on it.