Since node uses javascript, can it act as a webrtc peer?
Can I then encode it as a VP8 stream and broadcast to all other peers?
WebRTC is a browser API rather than being part of Javascript, so it'd need to be implemented as a Node module.
There are projects to build this though. Check this out:
http://blog.appfog.com/new-horizons-in-node-js-app-js-and-webrtc/