Replacing YouTube will be technically difficult and financially brutal.

I think it needs to happen though.

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We would need distributed storage or people willing to "pledge" storage. Like running a relay but running distributed storage relays?

Have you looked a d.tube, which runs on IPFS and distributed storage? Something like that where CID posted in Nostr notes could be indexed and found quickly, then distributed and shared on nodes to make them easier to find would be very useful.