Or they could just send the video uncompressed and then it would take even less hardware resources to decode on the client side. Why, in a sense it would be a lot more like decoding analog television signals at that point. (Not least of which since few clients would have the network bandwidth to handle more than 360-480p of that ;)

VP9 is not more bandwidth efficient than H.264. You’re thinking of AV1 here, which is only encoded by YouTube for VERY popular videos.