If we want to have a "free" (as in no subscription and no money required to be payed for the service) video sharing/uploading site, what model would that make it work and still have human reviewing? I consider the fact that there may be undesirable videos as the cost of having such a site, similarly how to the "cost" of having a free Internet is that there's going to be lots of hate online and free access to tutorials to make bombs and what not. It's part of the deal and I'm happy with that, YMMV. If you worry about what kids might access then don't let them access Youtube but please don't create laws that would make free video sharing sites illegal/impossible to run.
This is true for pretty much any free Internet service that allows for user content. If all of Internet content production will go back to just "official" creators (because they are the only ones where the cost/benefit math would make sense) I think that would be a huge loss/regression over what we have gained since the age of the Internet.