Let's not be disingenuous, here. The average consumer can't afford an apple TV and would struggle for a $400 nicety like a DVR. Further, by your logic, people would probably do better to just buy xfinity or some similar service and get all of their tv services built into their content provider.
What does Apple TV offer other than smoke & mirrors?
Well, smoke, mirrors, and the priviledge of having a TV that'll be useless in 5 years.