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Energy loss from air resistance typically is quadratic, not exponential, with regard to velocity. So it’s worth much less than you’re arguing. And the arm has to rotate from what I can understand, so the end rotational velocity - and hence, rotational energy - would be the same?
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If I'm picturing what you're explaining correctly, I think this would be difficult. Suddenly accelerating the arm from zero to hundreds of mph would put immense stress on the arm, not to mention whatever you're planning on using to transfer that energy (you kinda hand waved that bit).

I think your assessment is correct about the energy losses. I'm just not sure about the fix.

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I think the fix is essentially a whip, that's what I meant by elasticity and flexibility.

If you want to accelerate a weight quickly in a single swipe, (simplified) gradually reducing the mass along the length of the whip imparts more kenetic energy at the end (the whip crack).

So the arm would no longer be rigid, although you can see in the OPs video it isn't actually fully rigid.

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The arm (or whip) would still have to accelerate from 0 to ~2000+ rpm on half a revolution even though its flexible. So there would still be enormous accelerations even though the whip eventually partly smoothens out the peak acceleration. it would be more like a collision which in turns introduces higher stresses (and probably vibrations too) to the system. Both requiring you to increase the strength + rigidity of the system and hence also increase weight on the arm. Which in turns increases inertia and the "collision" effect.

Not saying its impossible to create a successful system like that, in fact it sounds sort of a natural/organic design that potential could be closer to the optimal design, but it would be more difficult to accomplish and probably need more testing and design iterations. So I think OPs strategy is more simple and pragmatic in this case.

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One could test this manually with a whip, right? Attach the ball at the end and try to crack it.
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Nothing above absolute zero is fully rigid.

You're going to transfer the energy quickly, you'll just break any "arm" that's light enough to accelerate with the energy available.

You could maybe use an 'already broken' arm (rope, like a whip) but then it's not a trebuchet.

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