No, the Siri server does not need to reach into my database at all, the two can be kept wholly seperate. I say "modern family" into the Siri remote, my voice is sent to a server and processed, and the server returns "Modern Family, tv show category, itunes id, etc etc." back to my AppleTV. Then the AppleTV can query my HomeSharing database (without reaching externally or sending anything externally) to see if there are any tv shows called "modern family" or any tv shows that match the same itunes id stored in my HomeSharing server. Thus, the Siri server never knows, nor need to know, what is in my database. No need to invade any privacy, at all.
The 2-step process is actually quite a great idea. Well said! To that I would add the following possibilities:
1. To bring the TV further into the heart of the media room it needs a way to aggregate iTunes and non-iTunes purchased media. One possibility - and there are pros/cons on this - would be to integrate with Ultraviolet. Yeah... I know. But it could immediately make the "upgrade my local media to UV licenses" a possibility. Now instead of ripping all my media I could spend $1-$3 to acquire a digital right. End of problem.
2. In addition to serving media, a local iTunes instance SHOULD - in my opinion - be available to CACHE cloud data. For example, I have a medium sized library of music and frequently play the same 3-4 playlists. It would be great if the TV could notice that I've played this several times and instead of streaming it from the internet every time use the iTunes Home Share to cache it. Next time I play it would be 100% local. This could also be used for movies (IF movie is local THEN play from local ELSE stream), TV shows, podcasts, and even photos. With ISP's applying data caps it doesn't make sense to keep transferring the same data. Save that for new stuff!
3. One thing that would better facilitate all of this is to stop having multiple places to look for iTunes media. Right now we have "My Data", a "Home Share" and potentially multiple instances of "Shared Data". All of this should appear in a single interface.
Just my 2-cents. Some of this is slightly off topic, but once you start discussing merging local and cloud libraries it becomes important to recognize all of the possibilities.