But hey, at least the standards committees are working on new forms of DRM so the NSA can't tap your video cable and see your screen. Or something.
It's of pretty dubious effectiveness, and quite honestly has screwed me in the past more than a few times even when I was doing something 100% legitimate (like renting a movie on iTunes and trying to use my MacBook's HDMI out to the TV... and it refusing to play).
Not to mention there are many, many more ways to record HD content from a source than tapping the video output.
That doesn't mean they have stopped preventing people from watching their just bought content on a beamer or display without HDCP support. Oh no, that stuff continues right now.
In the history of DRM, this is probably one of the most bizarre failures. You can reasonably assume it never stopped anyone from making illegit copies (capturing very high bandwidth interfaces like HDMI is decidedly non-trivial and simply not worth the time investment if there are much easier sources), while denying people who just seconds ago shelled out cash for your product access for a reason they will not understand and will certainly not appreciate.
No, the NeTV does NOT do any kind of decryption. What it does do is encrypt its own image using the same key in parallel, so that it can overlay its own display on top of the incoming display stream.
It does include an implementatiom of HDCP that could be used for decryptioon if you work hard enough at it (and I would guess someone worked hard enough at it), but as it comes out of the box, NeTV cannot be used to strip off HDCP.
That's a fragile attack anyway, as I imagine the key they're using would be revoked. The only attack that works is one that uses the master key to generate keys that haven't been revoked, which I doubt their hardware does. (Illegal and all that. Just being an HDCP endpoint is easy; take the chips from your TV product and stick them in the splitter. "Oops, sorry." But then you get revoked.)
I think he was referring to the fact that industry fails to provide end-users with good, ubiquitous and easy to use cryptography for privacy, while on the other hand video standards have repeatedly been delayed through industry mandating ubiquitous cryptography for digital rights management.
e.g. one of the (likely: many) topics that are being discussed in the committees designing the next generation of DVI/HDMI/DisplayPort standards likely is how to encrypt the video signalso that a customer is barred from recording a movie. Which delays the availability of future standards describing how to drive your 5K monitor at 60 Hz over then-improved HDMI/DisplayPort connections.