Google didn't think it'd be worth it to pursue a solution that would solve this, and probably nobody internally wanted ownership of it. The second best solution

Google didn't think it'd be worth it to pursue a solution that would solve this, and probably nobody internally wanted ownership of it. The second best solution is the one that doesn't cost much and solve the problem. Youtube being the only game in town, where are people gonna go anyways? Daily Motion? Post implementation KPI probably showed that traffic hasn't budged, and the problem has been solved. As far as Google is concerned, it was a rational decision.