The problem, as many folks have discussed at length, is that the file size for HD movies, in particular, may be prohibitively large for the garden-variety home broadband user.
Storage isn’t a problem anymore. I just saw a 500GB USB drive for $140. Since the AppleTV isn’t meant to store this stuff permanently, adding that drive to your computer to store your HD movies would be fine. (Just be sure to back them up.)
LAN speed isn’t a problem anymore, since the AppleTV has 802.11n, and can support streaming an HD movie that isn’t synced to it from your machine. And since Apple also makes a base station that does 802.11n as well as printer sharing and
Content isn’t a problem anymore, at least for US audiences. There are plenty of video podcasts and HD and SD content available that will play on the AppleTV, and cheap tools to convert other content, like DVDs, to work with the AppleTV.
The problem I see is our outdated telecommunications networks. The monopoly or duopoly that most of the US lives under when it comes to broadband is stifling innovation. If it were a matter of population density, then NYC, LA, and especially San Francisco would be able to get similar offerings to Seoul or Tokyo. However, 100 megabit broadband for the price of our piddling 8 megabit asynchronous broadband does not exist anywhere in the US.
We need to change the telecommunications laws at the state and local level to increase competition and push out truly high-speed broadband, or products like the AppleTV or the Xbox 360, which can download HD movies, will never achieve their full potential.