Why? People have been saying this for years. Like it or not, DVRs are outdated. Why bother recording and storing locally if you can have content delivered on-demand from the cloud? DVRs are power hogs, space hogs, and pump out a lot of heat.
Because most people don't like paying a few per show we watch, nor have to wait until the day after it airs so they can watch it.
I have a DVR so that I can start a show 15-20 minutes after it began airing, so that I can watch it commercial free and end the show at about the same time it ends for people watching live. I wouldn't have wanted to watch the series finale of LOST (even though it sucked bit time) the next day. I wanted to watch it when it happened.
Also my wife and I watch about 8 shows a week. So at $2 per show that's $64 a month for TV, and that's way more than I pay for cable right now. So if I wanted to replace my cable it would cost me more, and I would have access to less, since I couldn't just turn on the TV and surf, or play cartoons for my kids.
The "paying for TV shows and watching them the day after they air" model is a non-starter. People want a set monthly fee and the ability to watch the shows when they air. If Apple can accomplish that then this will be huge. If they can't, then this will be the same old Apple TV (a glorified iTunes extender) except with some apps.