I think this video misses the key point. (Like all of the pithy web video stuff produced by people who weren't there when it happened, pontificating on What Went Wrong.)
Here it is in a nutshell: AOL is to blame.
Back in the day of the early web, there were isolated islands of network interaction, that didn't really cross over very much. BBS. Fido. Gopher. AOL. WWW. Telnet. Archie. eWorld. The WeLL.
Each of these interactive tools were synonymous with the communities that used them. You used the Fido tool to log in to FidoNET. You used Gopher to find Gopher servers and transfer files and mail. AOL, eWorld, and The WeLL were servers you logged in to, and participated with those communities in those spaces.
The World Wide Web broke this model, and HTTP-based sites were now able to share files and data between the different tools and servers. You could write an HTTP front end to your FidoNET server, and people could use NCSA Mosaic to log in to your FidoNET, and see/transfer files in a visual tool, rather than command-line only.
Everyone using the World Wide Web had their own site.
Every single person was a CREATOR of some sort.
Maybe it was a list of porn sites. Maybe it was a list of parts for old BMW airhead motorcycles. Maybe it was ASCII art pictures.
Whatever it was, the same tool you used to browse other sites, was the tool you used to create your own site.
And, by default, everyone's Bookmarks List was public. That's how you found stuff. You went to someone's site, clicked on their Links page, and saw what sites they had links to. Click, click, click... rabbit hole!
Along came AOL.
America Online was originally just email. But they also created a custom, curated environment, where people could get movie listings, read news, and send messages to each other.
They business model was to charge by the hour, for the connection to AOL's servers. So they wanted you to stay logged in, and clicking around their properties, so they got to charge you for the access.
After much debate, AOL opened up their "walled garden", and allowed their users to VIEW and BROWSE the world wide web.
The change happened almost overnight.
People (like myself) had their own web servers running. Mine was on an old Mac SE I had in the corner of my bedroom, with a dedicated modem and phone line.
Suddenly, my $15/month phone bill for that line, and service, shot up to more than $50/month.
Other people, who had been serving their web sites for years, were suddenly hit with thousands of dollars in service fees from their ISP due to huge traffic spikes.
ALL of this activity was from the AOL people, who were not CREATING anything. They saw the internet as TV, and just consumed, consumed, consumed all of our paid-for content, for free.
Sure, AOL subscribers paid their AOL access fee, but AOL paid us web sites ZILCH, and we were forced to shut down, or monetize our sites to pay for the bandwidth AOL's looky-lous were consuming.
This is where the utility of the web ended.
Now, you needed to monetize your site. You had to measure "views", and run ads, and give up space on your site where CONTENT used to be, and serve flashing GIFs that advertisers paid you a fraction-of-a-cent per click.
Once that happened, the altruistic, creative, and generous nature of the web was destroyed. If you offered quality content for free, you were on the hook for enormous ISP hosting bills. If you monetized your site, you were in a constant war with your users that still continues today.
AOL fucked it by inviting "spectators" to simply look, without participating.
AOL turned the internet into TV.