It's not proprietary, it's source-available, and it plays a lot more than YouTube videos - in addition to YT, I use it to watch Nebula, Twitch, Odysee, and even Peertube on rare occasions. There are other plugins (that I don't use) for BiliBili, Rumble, Patreon, Kick, and Soundcloud, and the way its plugin system works, there's potential for many other paid subscription-based streaming services to be viewable through Grayjay. That is its real strength. If a creator uploads to a bunch of platforms, users can follow them on the platform they prefer, and get all their updates from one feed in one app, with added functionality that the official apps or sites simply might not have.

This is FUTO's way of trying to make web video platforms more competitive, by creating an app that can interface with content from all of them and has all the popular features even if the sites themselves don't. Grayjay has playlists, likes, dislikes, background playback, picture-in-picture, local history, the ability to block certain creators from the home feed, and the ability to hide individual videos from your feed. Furthermore, creators get a lot of ways they can monetize their content in Grayjay, like putting their merch store under the description of their videos, donation buttons, links to their Patreon or other subscription services, or general promotions, that would appear under all of their videos. Like... there are a lot of features here that really improve the experience with otherwise lackluster competitors. This tilts the market a tiny bit away from the established dominant players, and every new Grayjay user tilts it a little bit more.

Finally, it's worth emphasizing that this is not Louis Rossmann's personal pet project. His promotion of Grayjay, while it does align with his personal values, is paid work for a literal tech billionaire, Eron Wolf, who created and runs the FUTO organization. Neither of them need you to "take Louis Rossmann seriously." They only want you to consider if the apps the company makes suit your needs and values.