More timely and interesting perspectives from Cringely; read the full post.
What's driving this trend beyond the simple needs of VCs trying to find good places for all that money is Google. Will there ever be another Internet success to rival Google? Not in this decade there won't. So rather than even trying to repeat Google, VCs participate in the Google ecosystem, the best example of which is YouTube, which just made a few VCs a LOT of money when it was purchased by Google for $1.65 billion.
But the very success of YouTube strongly suggests that there won't be another YouTube, simply because one site downloading 58 percent of all Internet videos and that site, in turn, being acquired by the second-biggest video downloading site that also has more money than God, well the YouTube guys would have to commit mass suicide to blow their lead at this point and I don't see that.