"Google pays creators 55% of the ad revenue, so yes Google has to pay for those videos."
Google does not have to pay for videos. If a video brings google enough ad revenue, they willingly give some of it to the channel that made the video. They do not pay a fixed or up-front cost, and assume none of the risk/effort in creating videos. To be fully pedantic, Google doesn't pay for videos in any sense, they pay for the resulting attention.
"People upload to YouTube because YouTube gives them plenty of ad revenue. They don't upload to sites without a lot of ads since that would reduce their ad revenue."
The videos people want to watch are only on Youtube -> Viewers only use Youtube -> Content creators only upload to Youtube -> Repeat... Google's centripetal force prevents competitors from competing.