One important thing Youtube provides is the encoding. It is rather difficult to re-encode large volumes of videos efficiently unless you have a recent, multi-core desktop CPU.
This is definitely true, but if you have handbrake or similar, the hardware encode/decode in your CPU or GPU is actually pretty fast and good. This can be accessed via VAAPI, VDPAU, QSV and NVENC on linux (depending on your hardware), VideoToolbox on Mac, and also various options on Windows.
GPU encodes are far inferior to what YouTube provides. The bitrate is quite low and the quality acceptable for most purposes at higher resolutions. CPU is fast only if you are willing to have a fairly high bitrate, even with many cores.
