I think by the logic of "either you're a neutral party or you are not" no provider, big or small, is a neutral party, but I don't think this would produce the best outcome. It's a very good thing if we have lots of sites making different editorial decisions about what is and isn't allowed from users in a community—whether it's a search engine, YouTube, Facebook, Twitter, etc—and let the competition of different rulesets in a market determine who gets traffic, attention, and revenue.
But making editorial decisions downstream—what it chooses to show to users first vs last—doesn't change what people contribute, and this is where Section 230 is trying to provide a balance. People can contribute whatever great or terrible things they contribute, and Section 230s stance is, the provider just has to remove it if it's actually out of bounds. That allows sites to have their own editorial decision-making downstream while allowing user-generated content to flourish upstream, so those decisions matter at all. If the burden of moderation is moved farther upstream, to the point at which people contribute, you've increased the barrier to creating content entirely, you've turned every social network into a newspaper, and you get none of the benefits of the scale, low barrier to entry, and low marginal cost of the Internet to content creation.
In my view, an algorithm is no different than the downstream moderation decisions every website makes with or without an algorithm. Of course an algorithm has values. That's the point! They should have values, and people should choose which sites to use based on how well those design decisions translate into value for the user. Rather than the existence of out-of-bounds content in their systems at all, we should be judging YouTube and others on how well they identify and how quickly they remove that content and how quickly they update their policies (which is just another word for algorithm) to reflect those new values. This is explicitly a tradeoff for making mistakes in the interest of making progress versus safety, because what I'm advocating here does mean you get terrible stuff posted to places where it can get a lot of reach, and it's more likely to get that reach than with a system that moderates farther upstream. Where I think we should be coming down stronger is in regulating reach, not access (at least not entirely). The speed of the stream—the speed of virility—should be slowed to allow for reason to re-enter the conversation. That's where I think regulating content on the Internet needs updating, but not so far upstream that you stop it from getting any kind of reach at all.
The practical framework for regulation that I'd suggest is, if something hits a threshold of reach, it gets moderated more heavily and judged more heavily by authorities.
Related: Deciding on what counts as "out of bounds" content is also extremely hard, but we can put that side for a second, because I think the main issues here are 1) if a moderation decision is required, and 2) where the moderation decision occurs.