I don't think it's the software that's keeping it in the background. The instances I visit have seemed very functional. I think it's the simple fact that hosting large amounts.of video is really expensive in terms of storage space, bandwidth, and processor time (for transcoding). For a recreational self-hosting individual, it's just too much.

I'd really love if PeerTube could become a standard, but it needs a catalogue of back content, better discoverability, and most of all, to offer financial incentive to move over. As much as I hate to say it, I think something crypto backed like odysee/lbry is more likely to become major.
There's no payout for putting videos on peertube, and there's not enough audience to get sponsorships. If you really want to make peertube a success, that's where it has to start. No amount of technology will make people go from making some money to making none money.

To contrast with the popular sentiment here, it seems to me like the missing piece in the peertube puzzle is actually creator coops as an organization. I think these probably look a little like some of the more creator based streaming services out right now (think dropout and nebula) but could just as easily be organized around things like influencer houses once there's a clear model to emulate.

Very often progress is blocked by culture, not software. When we coordinate to discover our shared interests we can better target our action to change this culture in our communities and achieve greater software freedom.

Framasoft has 1 full-time dev dedicated to it, there is a roadmap of upcoming features but honestly, hosting costs is what is preventing most youtubers from trying it

At this point YT is more like TV: you make some content, YT uses it to show ads, you get part of the profits. If you just want to share some content with people there are many ways to do it. If you want earn money doing it there's really just the ad supported big social networks. Open source solutions have their uses but can't really compete with YT.