Edit: To clarify:
Is it even possible, financially speaking, to keep adding storage? I mean, advertisements don’t even make a lot of money, is the indefinite growth of server storage even sustainable?
Or will they do what Twitch does with old content and just delete them?
Do you absolutely know they’re storing those qualities individually? It’s perfectly plausible that they do on the fly transcoding.
Like LetMeEatCake said, storage is cheap, cheaper than CPU power. I don’t know for sure, but if you have a video that will be played 1000 times, what would be better? Transcode 1000 times or store 8 versions of the video?