First you use the original uploaded file but realize it's huge.

Then you transcode it down to a lower bitrate/resolution. But 2 options is still not enough so you convert it to 144p/360p/720p/1440p/2880p, at the cost of 5x the resources. Then you want to do per-title encoding to optimize the bitrate but that increases the resources used by another 3x-5x. And then you want to support new codecs like AV1 which you still need fallbacks for and where hardware acceleration is not fully available...

And you go on and on with the cost increasing rapidly. Until media hosts have a large and sustainable revenue stream to do this, which they don't, this can't happen. Except as a dumb mp4 viewer, at most.