I'm just under 40 and thought it was super weird when they bought YouTube. They already had Google Videos, which offered higher quality and was more reliable for me than YouTube, DailyMotion, or Vimeo at the time. Why they didn't just improve the discoverability and UX of what they already had was completely beyond me.

I was working at a crawling-based business around that time, and we thought it was because bandwidth contracts at that scale were symmetric, so the idea was that Google could serve video for ~free because they were crawling the whole Internet constantly and serving extremely light weight pages of ten blue links.