Fair enough if you have stuff in "the cloud", but what if you're internet connection goes down, or your connection speed has slowed down because it's a busy evening? Then you just have to wait every so often while it buffers the rest of the film.
The majority of broadband users in the UK still don't have enough speed to watch HD over the internet. (Although this is changing)
Ok, so lots of people use WiFi and don't want wires around the place, but your AppleTV has to be physically wired to the TV, so what's wrong with having another cable connecting it to some storage. Besides WiFi is still not 100% reliable, why do you think industry still use Cat5e/6 ?
I've had plenty of connections dropped or transfers fail due to Wifi.
The current Apple TV is basically an iPhone4 in a small box, so why not include the iPhone's storage?
Also what about content in other formats? Files off your camcorder or divx content?