Hmm. I can see how the API key could be an issue with members you don't trust.Your method has a few complications. First, you'd have to expose your API key. Then, you'd burden the server with large uploads. Third, members could breach YouTube terms in their uploads and get YOU banned!
One potential use case I'm considering is effectively for small private forum who want to get off of facebook groups and What'sApp group chats, but still have video upload and sharing functionality.
Small, close nit group means API access key isn't a big concern.
The forum/main sub forums are private with access by vetted usergroups, so no SEO benefits needed, hence all videos should be unlisted.
As it's a small group there won't be tons of large concurrent video file uploads bombarding YouTube with the one API key.
As a result, it means the user experience is great for all the other forum/group members who don't have or don't want to create a youtube account.
I understand your current default setup, definitely better for medium and large forums to help it scale, and the SEO benefits could be great too. But there's definitely a separate use case for those of us with some very small private communities that simply want to get out of the Facebook/What'sApp ecosystem, while still making video upload as easy as possible for our members. These small forums are probably the kind that don't otherwise need beefy hosting either, which means they might choke on the built in video upload in 2.1, making your add on the more attractive option.