I was looking recently for a solution to display a status board for a small business on an HDTV. 40" TVs can be found for $180 (you don't have to spend $3000 to have something useful), a mount is $20, and the app is $10. You've got most of the components for $210, but then you have to stomach the $200-400 to buy an iPad which will sit unused taped behind the TV just to display the status board. Not to mention you have to secure it to prevent theft if the TV is on a high traffic area.
The idea that you have to sacrifice an iPad doesn't feel right to me, even though you could get an Apple TV for roughly the same price (< $150), but the Apple TV would provide more functionality (e.g., the Apple TV could be used as an impromptu projector through AirPlay).
They chose the wrong platform for the app. They should have developed it for the Apple TV.