Honestly you won't notice a huge drop in quality. In some cases it won't look as crisp as a movie being watched directly from a Blu-ray Disc, but if you convert/compress it at a high enough bitrate there won't be any noticeable artefacts and is still a pleasure to watch - I've been able to rip and convert my Blu-rays into files that are around 4GB in size and they still look great.
The only advantage, as you asked, would be of convenience - people can just switch on the Apple TV from their seat and stream the film from their computer. With putting the Blu-ray on it involves having to get up from your seat, putting in the disc, waiting for it to load, and then navigating the menus... and we both know how lazy people these days are 😉