I'm the first to admit that I'm a fan of YouTube, but this really has me baffled.
If you're too lazy to click the link, Time magazine honored YouTube as "Best Invention of 2006", which I think is a dubious honor at best. After all, amateur video - embarassing or otherwise - has been circulated publicly for years. The web's not new, and the web as a playback device for video isn't exactly new, either. Even the way that YouTube delivers video isn't the best: the connections can be painfully slow. I agree that it's made a huge cultural impact, but I'd like to believe that there are more worthwhile inventions that could garner this type of award.
Okay, now that I have that rant out of my system, here's the other side of the story. Amateur video is also becoming an inexpensive way to provide major entertainment outlets with... entertainment content. It's cheap, it's quick... and the possibility, however slim, that you could be the Next Big Web Video Thing will keep submissions rolling in. Of course, there's the likelihood that the fickle viewing public will eventually grow tired of homegrown entertainment, but for now it's a wave that's yet to crest.