Launching it with 1080p hardware doesn't mean we're forced to download 1080p content. Those happy with 720p "as is" would still get their "good enough" or "right size for various bandwidth constraints" 720p and be able to enjoy it at it's fullest glory (because, just like in Macs, hardware overkill doesn't lesson the experience of software that doesn't push that hardware's limits).
But, it doesn't work the other way. You can't roll out 720p hardware and max out any 1080p software from any source. Instead, that means tradeoffs for those that care about such stuff.
Lastly, 1080p doesn't involve solely BD rips or Torrent content. I have shot very precious (to me & mine) home movies on 1080HD camcorders for 4 years now- just no

TV way to pump that content to the 1080HDTV. Youtube, etc. and Vodcasts could be a source of 1080p content until some Studio is tempted to test the profitability of selling/renting a movie/show in 1080p. Etc.
If I was Apple (#1 interest in selling lots of hardware), I would build in 1080p, and launch software tools that would help owners make their own 1080p content until the Studios and broadband infrastructure gets their acts together. I'd also either create or facilitate an add-on option so that it can also be a HD DVR. If Apple can't do it per existing arrangement with Studios (or the conspiracy theory that says all Apple cares about is selling iTunes content), leave that to someone like Elgato (and make the new iTV open enough to allow such add-ons). The ability to capture your own 1080i/p content will pressure the Studios to offer that option in the iTunes store, rather than lose such revenue opportunity to those that capture and store it via some kind of DVR-like solution.
The broadband constraint problem is unlikely to get addressed on any major scale until the pressure for more broadband starts cutting into revenue from broadband subscribers. In other words, the big corps that feed us broadband don't have huge incentive to expand the pipes, but they have legal responsibility to maximize profitability. You don't maximize profitability by sinking tons of cost into building bigger pipes. However, if customers get unhappy enough with your limited broadband solution to start quitting you for other options, incentive to compete grows. I know the problem is that for many here in the U.S., we have about 1 choice for broadband, but still, only real need (real opportunity for profit) motivates action on this front. If we accept the 720p argument based on it's ability to work with existing broadband infrastructure, there is basically NO incentive for the broadband piece of this to expand the pipe.
Note that absolutely NONE of this adversely affects the "720p is good enough" crowd, as they can continue to enjoy the smaller files sizes and lower resolution exactly as they do now. 1080p hardware would just invite the other camp- those desiring "1080p or bust"- to also buy and enjoy a next-gen

TV. You (720p-ers) win. They (1080p-ers) win. Apple wins, by selling more hardware than if they catered it only to the 720p group.
Nobody loses.