VP8 in IE etc
surely isn't a huge problem- couldn't it be handled by some sort of plugin?
If Youtube said "we're switching to VP8 in one month" you can guarantee that VP8 would be available for IE almost immediately. Microsoft cannot afford to have customers going off to Firefox, Opera, Chrome, etc. because IE _can't_ do something; that'll lead them away from Live Search/Bing and towards Google/Yahoo/whoever and erode what limited presence they have on the web.
Plugins, or VP8-enabled versions of browsers, would appear for mobile devices pretty quick as well. People wouldn't want to be without Youtube!
Remember also that Youtube isn't the only site to use Youtube videos- millions of other sites link off to them. So even those who don't want to spend 4 hours watching kittens playing with string will update to allow them access to their chosen video feeds.
And not having to pay Adobe (or use pirated software, which would be bad if you got caught) to create Flash videos would surely be a boon for the porn sites that make up most of the web- it'd lower overheads.
Not to mention that an efficient, widely-used, Open-Source codec with a massive userbase (and which would have a big community springing up around it) would be snapped up by embedded kit developers.
This could have surprisingly large repercussions for the Web