No competition?
That's odd. The last I looked, a PC hooked up to a HDTV over either VGA or a DVI-to-HDMI cable does a perfectly good job of letting iTunes play all your purchased video.
Add in the XBox 360 (at the same price as Apple's device and yet allows you to play games too) and PS3, both of which will play any H.264 files you have without encryption, and there seems to be a fair amount of competition for the Apple device really. Doesn't the Wii's browser work with YouTube as well?