I do use my PS3 to watch DVDs and Blu-Ray and that's because it was a cheap alternative to a Blu-Ray player, and (obviously) I like video games, but it just gets ridiculous. Who cares if a console now can't play DVDs? The Wii U can't, but really, anyone interested in a Wii U probably has at least one other device that can already play DVDs anyway. Adding that functionality would add to the cost of a console where Nintendo is already losing money per sale, so I don't understand when people use the lack of that feature as a criticism.
For me, it's all about space. I only have X inputs on my receiver and X space on my TV stand. I would rather not have 3 systems and a bluray player hooked up at the same time in one room. Sure, I could do it, but it's more convenient to have the option to throw a movie in without having to change everything up. It's an annoyance more than anything else, especially when everyone else offers/will be offering a fix for the clutter issue.
That being said, the likelihood of me purchasing a Wii U is approaching 0 with each passing day. Lackluster library, loss of some third party support (I think more will bail in the future), limited functionality (no BR player, for example) - it just doesn't do it for me.
Also, the loss leader thing happens with every console, not just the big N. That's not a legit excuse for leaving out a standard (now) function of home video game consoles.
I know DVD playback, etc is not necessary to enjoy video games, but the precedent has already been set (for several generations now). One of the reasons there are so many video game consoles in homes today is because of this all-in-one philosophy. They're competing with Apple, Roku, Toshiba, Panasonic, etc. Oh yeah, and computers in general. They need these extras to draw attention to their products. I have a ton of friends who love games but have kids, wives, partners, etc - and they would probably have to argue to get a game system on their main TV if it didn't have alternate functionality.
Of course it's a double edged sword, but without the sales figures, you don't get as much content (games). It's kind of why I don't get the whole "hate on the FPS & sports genre" mantaility. Those games put so much money into the industry it's crazy. Video games wouldn't be the same without that kind of hype and money flowing. Granted, it would be great to see that excitement and activity surrounding other genres (Elder Scrolls excluded), but we need people to love that stuff to ensure that other, smaller companies get funded for projects that we might get excited about.
