@ Doug Petrosky 1
"(and it becomes completely un dubious once you start sharing it with others)" - I was wondering if you would make this association. You know, not everybody who rips their DVDs has the urge to splatter the data to the nearest fileshare site.
"What I'm talking about is all 27 of those devices anywhere in the world playing that content legally at the same time." - mmm, exactly how likely is this to happen in reality?
"The odds that a future device will not support the INDUSTRY STANDARD" - I wonder how well my (Android) phone would cope with an MPEG2 stream (say, a VOB file). I wonder how your Apple phone would cope with a VOB file?
"MP3 has survived longer than that and will still be going strong decades into the future." - mostly due to the mountain of MP3 compatible media players, and their associated data. Perhaps sometime soon the world will make the transition to AAC (which offers better quality results for the same bitrate), but it won't be just yet as suport is still patchy, especially on little personal players.
"past failures of other companies have shown that normally purchasers are compensated." - hehe, dream on. You will be compensated once everybody higher up in the pecking order has stripped the carcass clean. In other words, in the real world, it's the creditors and shareholders that see something back and it's people like us that get a kick in the balls.
"I did purchase a few shows [...] that were 320x240" - you *paid* for 240p?!? I can't comment on the 640x480 as you may live in an NTSC region. If I was going to pay for content in that manner, I would demand 720x576 anamorphic (i.e. like any decent PAL DVD).
"it is possible at a future date that for FREE or for a nominal fee my 480p videos will be upgraded to 720p or 1080p, something that will NEVER happen with physical media copies." - it is equally possible that it will not. As for never upgrading a physical disc, I have seen some decent quality DVDs upscaled to 720p and it looked pretty good. But then, being in a PAL region, we start with 576 lines so it's only 144 to interpolate. Things might not look so good upscaled to 1080p (but then I see a fair few artefacts in Bluray pictures playing at the local supermarket, so maybe an upscaled DVD wouldn't be so icky after all). Of course, if you start with only 480 lines, you're losing before you've even begun...
"At least that is how I see things." - à chacun son goût.