What you are describing are so called "edge" servers, and this is indeed a technique for content distribution, but it relies on partnerships with willing ISP. You essentially set up connection "peering" with the ISP, in which you bypass expensive internet uplinks.
However, I can also imagine that quite a non-neglectible proportion of Youtube/Netflix traffic cannot be retrieved from such a cache.
However, I can also imagine that quite a non-neglectible proportion of Youtube/Netflix traffic cannot be retrieved from such a cache.