My servers aren't sitting next to me. I have 2 in the US and 1 in the UK and also use an aussie hosting company for some clients. Someone does the on site maintenance and pats them down but they are controlled by me and used only for me or my clients.
The websites I create usually only have short promo type vids, film clips or even instructional how to's so when I've done them it's easier for me and the site to keep everything on one server. There may be some conjecture but I believe it's also better for SEO to house as much as you can on one server as most search engines will ignore a link to youtube, facebook and myspace etc because it can be considered a black hat method of gaining popularity.
I agree that users make the choice to view a youtube vid but it's usually because they have been sent the link and told it's funny. If you're trying to convince customers to buy or showing off new talent in a video clip you can't always rely on the viewer waiting for a video to load.
It's the nature of the beast we just don't want to be the first to wait for anything that's why when isp's tell us they will give us a faster service we think we have to have it without thinking that in many cases it's just not physically possible to go faster.
I don't know what broadband is like down in Lakes but most areas down have atleast ADSL these days. We've got over 23,000 people in my town and Telstra claim to have ADSL2+ but the one exchange that does have ADSL2+ is only good enough for high speed in the CBD, so it serves about a dozen houses at full speed but it doesn't stop them telling the customer it's good for the whole town. The disclaimer they make up about speeds dropping applies to about 97% of the town they claim can get their high speed service. ISP's suck and I actually regret working for one.