Regardless of pricing you can't substitute one with the other... Spotify is a streaming service with a massive library. Self hosting means you must BYO media... and, news flash, populating a library with relevant content that rivals Spotify or would satisfy your average user will almost certainly require illegally acquiring said content.
Youtube has much more music than Spotify, is better sorted by Albums (without holes, no skips) and you can easily rip it. It has all the better obscure artists, Spotify delisted. There's also a recommendation engine via YouTube Music.
Ripping from YouTube is piracy. Again, what OP is suggesting really only works if and when you build out a large library through piracy.