Despite the skydiving and the gadgets, Google I/O is really geared towards the developers. After the flashy keynotes are over, dozens of lectures and sessions take place. This also when the things more interesting to developers are revealed. But few people outside of developers would spend an hour watching any of the very technical Google I/O sessions.
You'll be excused then if you didn't realize, like pretty much everyone else, that Android developers will soon get a cool new toy to play with, a bona fide YouTube API. Until now, developers that wanted YouTube content in their mobile apps had to either rely on the prone-to-cause-problems Flash embeds, or redirect users to the native YouTube app.
The new API, which is not live yet and won't be for a while, will allow app developers to include YouTube videos with only a couple of lines of code. Expect to see much more interesting uses of YouTube in mobile apps in the future.