Its not really the cost thats the problem.

The 2 problems i see are that the technical overhead to start a instance is too heigh. And that peertube is majorly unprofitable.

Technical overhead can be solved with a service provider creating a single click to run service like moat of the Minecraft server hosts. Possibly even with a profit shair for zero cost startup etc.

The unprofitability is a harder problem to solve tho.

Storage space and bandwidth, as well as compute for re-coding lower resolution versions (although you can do that on another machine these days).

A cheap VPS will probably be insufficient rather soon, but something around 50€ a month should do it for quite a while.

I like the idea of content creators pooling together to create an instance.

Viewers could donate to the instance, and the money could be divided between content creators after server costs are covered. Suddenly you have an open source payment optional Netflix alternative up and running.

In a way it's a bit weird to me that we haven't seen more experiments like this. But then again, I guess content creators are too busy creating content to think about crazy innovative distribution models.

Depends mainly how many videos you plan on hosting, storage space is the biggest issue.

I've self-hosted a 5€ Peertube instance before, no problems. Expanding the storage would be rather cheap but I never hit the 500GB VPS limit before I got bored of the whole thing and shut it down.