I know a few people who buy DVDs, rip them, then resell the discs and think doing so is not against the law because they once owned the original.
So what? We shouldn't worry here about the source of the material but rather whether these devices can play it or not.
This device *must* play big MKV files (and other similar ones) which the current one (which I have) does not. Trying to play one on the current ATV just causes it to trip all over itself. Sigh.