Spend ages? Do you know how long it took to encode dvd to xvid three years ago (for me that is just moment ago).

I bet that you can encode movie pretty fast desktop machine today. Put 10 movie on batch and hit encode and everything is ready by morning,

But it´s true that it would be happyjoyandjeyj, but if you have some idea how much hw power encoding HD stuff takes then you would realize that putting that powerful cpu or dedicated GPU (which accepts only certain standardized h.264 encoded stuff) on this piece of toy I bet that prize would hit the sky pretty fast.

You can demand what ever you want but first people really have to think what is realistically feasible in mass production on prize that some people are ready to pay. Of course you can make niche device that has everything and costs pretty penny but then again only small amount of customers would spend big cash on it.