I disputed it, twice, explaining that it's just footage recorded from a game, and got the video restored... but in each instance, it took about a month for the dispute to be resolved! If I was actually a partnered content producer, making money from advertising, I would've been pissed!

No, if you were a partnered content producer you would sue Telstra for harmful interference.

Seriously, though: This kind of thing (not paying any random reporter, but making reporting dead easy for every nutter) is necessary to fend off the "due diligence" trap. Otherwise they'd find themselves in court every day of the year, on millions of cases.

Sadly, judges are even more stupid than politicians, and they do not easily apprehend that you have a hard time of controlling what people who are completely unrelated to your organization post or upload to your site, or what other websites that are entirely unknown to you might publish.

I remember this then-famous case when Heise (one of the leading publishers of computer magazines in Germany) was dragged to court and sentenced for publishing neonazi propaganda. What had really happened was that they had a public user forum where some disturbed guy posted a link to some website which said some stuff that was presumably not very... philantrophist. Heise did of course moderate these forums, but apparently failed to detect and remove the offending link within due time (whatever "due" is, most probably before it's posted).

Since that time, pretty much every German website has a disclaimer that they do not consent with anything that is displayed on any website they link to (what an absurd statement!) and that they have no control over other websites that they do not know about (again, what a bullshit...). It's deprives every logic or common sense, but it is necessary because judges are so fucking stupid, and in the end you are delivered to their grace.

Now, being the maintainer of a site like Youtube which lets users upload videos makes this issue a million times harder for you. In the end, you are responsible for what is on your site, and you are responsible for what you distribute.

In the case of videos/music, this can mean that you are guilty of piracy, because technically you are committing the copyright breach, not the end user downloading the content (also, the end user may have the advantage of plausible deniability -- they can argue that if they download something from a well-known, reputable source like Google, then they can assume it is legal).