My only concern with this product is that the hardware can...

My only concern with this product is that the hardware can easily be replaced by software. With SmartTVs in the mix, you can achieve the same result if XTV were to say create an app that replicated everything on the stick.

Having the computer stick implies work needed to be done on the client side but if they simply created an architecture where the server just serves up video content to the client then you just need a fast internet connection.