The irony is that cable TV is still doing pretty well. If the industry ever completely implodes, people will blame the men and women in charge at the time. But it's often the decisions made when things are going well that ultimately seal a companies fate.
Getting a head of TV over IP is the smart bet. The best time to do it is when profits are healthy and R&D spending is easy.
The problem is that many of these guys are old and rich. They don't see why someone would want to watch video differently, which is exactly why they shouldn't be in charge.
Being really wealthy is an excellent way to not understand a market.
At a publicly traded company, that is rarely the CEO's job.
There, the CEO's job is usually to keep Wall Street happy (or less unhappy).
NOTE: I don't actually know how common HDMI outs are on store bought PCs (since I build my own) but surely it is becoming standard?
Before anyone answers these rhetorical questions -- I know full well that things like USB-irda devices, XBMC with plugins to automatically torrent your favorite shows or more-likely-used-legally options like Windows Media Center exist, but there is actually quite a lot of software complexity that you are handwaving over here and you'd be surprised how close to technobabble gibberish this currently existing stuff sounds to an "average consumer".
Internet as the primary means to deliver tv content is absolutely inevitable and if I were a shareholder of a cable company and the CEO of that company was completely oblivious to the move to this future, I would be concerned. OTOH we are still at least a few years off from this being a really viable option for the masses. The current solutions all have pretty serious gaps. This is a big part of the reason the idea of a true Apple iTV is continually churned on the rumor mill. For whatever you think about Apple (I'm not a huge fan), one would expect them to deliver a true end-to-end solution, which hasn't really been done yet.
I think this situation is going to resolve itself when the generation shifts - I don't think the next generation will ever subscribe to cable the way their parents have, and the perceived tech barrier will be less with the next generation.