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?
They still keep the originals. They’re degrading the quality of older videos for bandwidth reasons, not storage.
Also, it’s not because of the price of bandwidth: It’s because they can use up so much bandwidth in a given region that they can cause slowdowns (e.g. hogging too much of what’s available).