Ok where to start...
1) Free "channel apps", but I don't think they will be pay per show, I think they'll be subscriptions. $.99 a month for ESPN, or whatever cable channel you like with premiums for HBO type channels, maybe $4.99 (price point is probably a pipe dream).
We've seen this before, not all people will jump on the band wagon, but enough that consumers will give it a shot. Critics will pan it because no one will watch TV without <insert your favorite channel>. Critics will be wrong, because people love looking at it and interacting with it. Content providers will do a 180 and come crawling back to the table (getting less than they would have got if they had any foresight at all).
2) Sure, its gonna have Siri, but its also going to have Apples version of Kinect. Obviously Apple and Microsoft are working on multiple UI designs. Microsoft just made a savvy move with Kinect and realized they had a way to bring it to market first with the XBox.
3) Why do they need an actual TV and not just the set top box? Why indeed! Hello 60" Retina iTV! The iPad 3 is yesterdays news! Ok, maybe not Retina...yet, but it will be better than normal. Perhaps that new SuperHD or whatever its called. (How awesome will it be to stand right up on your 60" screen and see no pixelation?)
4) Why twice the price? Because Apples strategy isn't market share driven! They don't have to sell 100 million units, look at the mac. Barely double digit market share and they have the highest profit margins around. They will enter the market making big money on each unit and not selling very many, more of a luxury Apple TV, meanwhile Sony and everyone else will make millions of TVs and sell every one of them at a loss. As time goes on they are able to reduce manufacturing costs making them more competitively priced and now, 5 years later, you have a choice. You can buy the typical TV does what you need it to do, looks decent or you can buy the new 60" SuperHD Retina iTV for a few hundred more.
And Apple takes another industry....