I think this is a dumb decision. Let's say that DVD playback costs $5 per copy. A retail copy of Windows 7 costs $190. Is it really worth the savings, even assuming that MS passes the savings on?
Windows 8 better have some pretty outstanding pricing with all of the stuff they're stripping out of it. I'm thinking $30 upgrade, $50 OEM/Builder, and $100 retail.
As far as stripping out WMC, I'm okay with that idea if it means that WMC will get some updates. It really hasn't changed since XP MCE except for minor additions of digital TV and Netflix. I'm really hoping for a Live TV Metro App on the start screen.