The theory behind YouTube and MySpace and blogs and other "look at me" Web sites is that people will post whatever they want to share, and public opinion will help separate the wheat from the chaff. Really good, entertaining videos, blogs, etc. will catch on by word of mouth, attract an audience, and then a following. Less entertaining material will languish in obscurity. In other words, the market decides what is or isn't worthwhile. The economic model is ads, which will get more visibility, and hence earn more revenue, on really popular sites.
This model is not new. In book publishing, there have long been what are called vanity presses, which will gladly take your money in exchange for printing a few hundred or thousand copies of your self-edited book. They advertise in writer's magazines, which are themselves an attempt to capitalize on the huge number of wannabe writers looking for the secret of success.
The arguments against vanity presses are two-fold: 1) They don't screen or edit anything, so there's no reason for readers to assume anything of the quality of their publications, as compared with those of a traditional selective publisher, and 2) vanity presses don't promote their publications, and don't have the clout (see #1) to get their publications reviewed, stocked in stores, etc.
The problem with the Internet isn't lack of information. It's lack of filtering. There's too much information, and no way for typical users to assess the quality or reliability of the information they want, if they can even find it. This is true with vanity publishing, and now Internet publishing as well. The word of mouth approach is interesting, but it is subject to the "famous for being famous" syndrome. Once a slight buzz is generated for a particular video, or site, or whatever, it could just grow and grow based on the momentum, and the ease of forwarding links around the net. If all arts sink or swim on the basis popular opinion, will we end up with a culture of fast-food-quality art and literature? Is there something that could be considered "good" art which may not be popular? If so, who will champion that in the age of You-this and My-that?