I'd like to know what the hosting bill on a video sharing site like that would be. Has to be outrageous.
Not initially. 500gb would be enough to start with. By the time you start making some money, then obviously it's time to start getting 1TB drives as needed. I don't think you'd ever need more than 5-6TB.
When you reach the end of 5-6TB, you can begin overwriting the old videos.