No sense
I just don't get this decision at all. As has been said, these channels compete on content, not on the method of delivery. Look how well different networks supporting VHS/BetaMax / HD-DVD/Blu-Ray turned out. It's just not what consumers want. What we need is a single point of access for online programming, like YouTube has done for amateur video.
The argument about advertising competition doesn't wash either - what's wrong with the existing model where each content producer is responsible for selling advertising on their own content? A single website/protocol to access the video, with advertising put into the videos themselves at the discretion of the producer. Seems to work well just now, gives content producers the ability to market advertising space on their content and makes them try to make their content as popular as possible, and gives advertisers discretion over what type of content they want their adverts to appear on.
Surely this is a no-brainer?