Writing in Ars Technica, Nate Anderson says the death of the Home Theater PC may be ascribed to several factors, including various rights management / copy protection / encryption technologies.
While the recording industry has largely learned its lesson from DRM, the movie business still thinks it's a great idea. You want to rip your legally-acquired DVDs or Blu-ray discs to your HTPC to create a disc-less movie archive? Forget it.
You can thank encryption schemes like CSS (DVD), AACS (HD DVD and Blu-ray), and BD+ (Blu-ray) for preventing this common request. The issue isn't largely technical, either. Despite the time and money invested in creating these schemes, bypassing them isn't particularly difficult, though the US DMCA will make a criminal of you for doing so. (There's a reason the AnyDVD guys are based in Antigua.)
