I might buy the Apple flavored kool-aid you're trying to sell me with that statement except for one major flaw in the argument. Apple was once also a HUGE supporter of PROFESSIONAL software and hardware as well. I've got Logic 9.1 (Mac only product as well) here for a reason and it's not because I wanted to make home recordings of me playing the harmonica! I'm halfway through writing, recording and editing my new album already and it's because it's professional software that I can quickly and easily jump into it and get it to do what *I* want it to do, not the other way around. And it is that professional sector along with high-end amateurs that Apple seems to have been slowly losing the past few years. I'd say it started about the time the iPhone came out (or within the year before it that they turned all their attention to it).
The problem is not that Apple CANNOT do more and yet keep it just as elegant and easy to use, but rather somewhere along the way Jobs got this idea that he doesn't car about the professional stuff anymore (odd to me given his history withe Pixar) and instead wants an iPhone in every household. Hey, that's great. How about handing the Mac and related products over to someone that actually CARES about them? How about an Apple TV product that is not just his "hobby" ? How about having a kiddy option and an advanced option to the software? A lot of products have basic interfaces with advanced features you have to turn on. That is exactly where Apple TV keeps going wrong. It wants to be simple. It wants to be easy to use. But THOSE PEOPLE ARE NOT BUYING IT! NO ONE I know has ever even HEARD of Apple TV. They don't push it; they don't advertise it and they treat it like some niche geek product. But then they don't offer geek features! And that is the problem.
To the hardware's credit, I have made my existing Apple TV units do EVERYTHING I could want them to do (either by hacking or converting video formats to work and tagging, etc. to make them look great in the interface). The ONLY problem is that I'm doing a lot of work I'll have to some day do all over again when I get a 1080p projector to replace the 720p one I have now. And I had to re-do a lot of encodes to make sure they play smoothly since it can't handle too many bits in a 720p file either. Other than that, hey it's working great. I might buy a couple of these new ones just to add movie playback to every guest bedroom in the house since they're so cheap (i.e. they cost $10 less than an Airport Express that only does audio!!!)
But that still doesn't mean I'm not cheesed about the 1080p limitation since I'd rather start making 1080p encodes that I'll never have to touch again probably in my entire lifetime (doubt I'll be going drive-in sized screens at short distances any time soon to see 4080p or something, most of which film sources couldn't get that much usable resolution from anyway and most newer films quite frankly seem to suck these days; I've been renting Bogart movies in B&W HD lately for goodness sake).
Still, I haven't seen a full rundown on the hardware specs of the new box. I'll be surprised if it really is limited internally to 720p. They'd almost have to work hard to limit playback in 2010 to 720p and it'd be just SAD if they did. Otherwise, the only "improvement" I see in the new model is the price. I'm sure the 99 cent rentals will be available on older Apple TV models so there's nothing new there. I think Netflix SD rentals will run just fine on the older models as well if they bother to add support in the software for them.
I think they're shooting themselves in the foot by not making it a full blown iOS device that can play iOS games from iTunes (the same ones that run on iPhones and iPod Touches). Throw in a little gyroscopic Magic Mouse Pad like thingy (or allow a real iOS device as a gamepad) and you'd have instant gaming platform as well at no cost since it runs iOS games. Frankly, I think they should let iOS games run in iTunes on the Mac as well as a front-end. Some of those games are just as fun to play on a 24" monitor as a little iPod Touch Screen, especially with the newer iPad games being higher resolution.
What I'm saying is my disappointment is from Apple being totally near-sighted lately. They come out with some whiz-bang cool gadget, but then they don't use it to its greatest potential or the related hardware around it (i.e. the whole iOS apps on Macs and AppleTV thing). Why LIMIT something that would clearly be better for the whole market with just a few changes? It's irritating. Just because Jobs doesn't want to sell 1080p videos just yet on the iTunes store that doesn't mean he should ignore the fact that LOTS of people are making their own 1080p home movies and MIGHT just like to view them on their home theater using Apple TV instead of a BD player, but he actually FORCES them to buy the BD player instead to play back those home movies in full 1080p because he cannot be bothered to add 1080p support to iTunes and Apple TV when he had the chance.
TV- just chips capable of 1080p instead of maxing out at 720p. 
