I would echo what claybutler says - Why would I not want my videos on one of the largest search engines in the world for free? Your self hosted video video may be spidered but if they were off site they'd never show up in "related" column on Youtube. You also need to consider the youtube platform in terms of having subscribers and commentors the "ecosystem". Youtube is the unsung hero of social media.
I've got 31 "home grown" videos on youtube with almost 70,000 views combined, I just don't see that kind of exposure coming from our website traffic.
Lastly, youtube videos are now integrated with Adwords directly providing even more reach
I've spent a lot of time recently optimizing videos for websites, Youtube, etc. For your website videos, use an offsite video hosting service like Wisteria, Brightcove or Kaltura (expensive but flexible). You can easily optimize the videos to show up in search results and drive traffic directly to your website, not Youtube. At the same time, post the videos on Youtube, Vimeo, etc - and load them up with you keywords. You'll get great results for Youtube and Google searches. The links provided have some really good tips on tagging your videos with Microdata, captions, calls to action and such. Make sure to take advantage of these things.