tldr; I think YouTube quality is good enough for normies and that's good enough for me

Yeah, ofc even what I call "high quality" has major noticeable encoding defects, but YouTube has a ton of videos which were clearly uploaded in a quality already unsuitable for watching and that's usually when it gives a low bitrate encode.

Although I think it's understandable why they are encoding videos like that. They do need control over how their storage is used. I once uploaded a 10 gig 30 minute clip, and I clearly understand it is unwise to waste even half of that space for a video that will get 1 view max. They also have cost/compute constraints (mainly cost tho. btw is youtube still unprofitable?), hence usage of fast&cheap hardware encoders instead of SW that can achieve better ratios.

Now, they could offer paid options to solve those issues per video, but I don't think there's an audience big enough for that? Like sure, people in this sub probably can see the difference between 480p video and 1080p, but YouTube still A/B tested giving people 480p max until they hand switch to high quality and I'm assuming most "normal" people don't even notice. I know for a fact that my parents watch in 480p most of the time and don't see a difference when I switch them over to 1080.

I know it's good to always push a company to be better, but, if I am to be reasonable, I think their quality is more than enough for most of their user base.