For me, and from the perspective of an aggregator, it still surprises me that Google does many of the things it does. There are plenty of obvious reasons for any company to buy YouTube, but Google started its life doing things differently. I am not clear why they are letting themselves become so distracted.
Buying YouTube will never be a bad idea. It has awesome potential in almost every way. Traffic, branding, buzz, revenue, partnerships, distribution. You name it. It's hard to say no to that sort of revenue potential.
What it doesn't have, however, is the key ingredient that made google a killer. Open Search. Searching YouTube brings back YouTube results.
Google was an aggregator, their goal was to 'get you off the site as quickly as possible'. Yet they are increasingly building or buying destination sites/applications.
While I agree with Jeremiah's assessment of their strategy - it seems to me counter productive to a long term strategy as a benign aggregator of the worlds information.
If you want to organize the world's information, it is, in my assessment, best to avoid conflicts of interest.