Apple internally built several TV prototypes. The project was nixed for the same reasons Apple stopped making computer monitor. Limited market potential.
Beyond all-in-one simplicity and beautiful design, major differentiating features over conventional smart TV were always on display and motion sensor, where the TV would immediately wake up to deliver notifications and respond to Siri requests visually. Much like Amazon and Google's smart screen speakers.
Given how minimal most TVs look these days (LG's OLED TVs are particularly beautiful in understated minimalist way), I am not sure Apple's TV would stand out all that much. While I would've loved always on display and all-in-one simplicity, would that be enough for the masses? Considering Apple TV's struggle for market share, my guess would be a solid no.
As for upgrade cycle argument, I don't think that was it. Apple is still selling Apple TV HD, released nearly 6 years ago. If Apple stuffs their TV with the best-in-class processor (e.g., M1 or A14), it would no doubt stay relevant for many more years to come.