Again, this is another of the tired old arguments against 1080p... as if the cost must go up substantially if we get 1080p.
On the hardware front (the

TV3) itself, I expect it to be $99. Look around. There are plenty of little boxes that sell at a profit and are capable of 1080p for <= $99. Some of those also have extra hardware inside to spin a disc and shoot a laser. I would think the world's largest company could get similar pricing for it's 1080p chip functionality so that it too could deliver a 1080p set-top box for $99 at a profit.
Apple has previously sold

TV (version 1) at higher prices. They believed price was a big obstacle to success. If they really feel that way, they are probably reluctant to go back toward those higher prices.
I just purchased a 1080p camcorder that shoots 1080p at 28Mbps... far, far superior to the max Mbps capabilities of Apple 720p or SD. I'm sure it's not as good as the camera the hooligans broke but the video it shoots looks far superior on my 1080p HDTV than anything I can get out of my existing

TV. 1080p recording is increasingly available in all kinds of consumer devices: camcorders, cameras, even iPhone 4s (and probably iPad3). It's not jacking up the cost of those devices to crazy levels; instead, it's becoming a commoditized benefit thrown in as an added benefit on a phone (for example).
On the software side, Apple may indeed price iTunes 1080p video rentals at a bit more than 720p or SD prices. But if that matters, you (and I) could still choose the 720p or SD version to save that money. 1080p won't be forced on anybody. It's just an option.