To provide a full-scale selection of quality programming via iTV, Apple effectively must become a cable provider. I highly doubt it wants to enter that space. If it does, look for the decline to happen sooner rather than later.
So, again, Apple is not this dumb. There must be more to the story. There has to be. Steve Jobs had other ideas; things you and I never could have imagined. This leads into obstacle number two -- Steve Jobs no longer walks the Earth. He no longer walks into boardrooms and gets what he wants, how he wants it and when he wants it. He cannot twist arms and proceed to execute and market what he gets to perfection. That's up to the people he left behind.
If you think they're up to the task, I respect your opinion. I have to wonder, however, if you're discounting the power of Steve Jobs as well as the enormity of what needs to get done in the process.