Here is the problem with DVD playback, and certainly why Nintendo purposefully left it out.
The cost of adding MPG2 playback, Macrovision support, etc. is about $10 PER UNIT (from what I understand - that is REGARDLESS of units shipped). Lots of people already bitched about the Wii being $249 vice $199. Another $10 was something they felt they could afford to drop (after all, let's see a show of hands here of anyone without a DVD player already?) ...
Thanks to the internet connectivity, they could offer a DVD channel anytime for a fee. My GUESS is - when Japan gets the new Wii+DVD, they will gauge response and offer the service via Wiconnect24 in other regions should this go over well.
I also believe the DVD player was left out INTENTIONALLY to allow them further differentiation from "the other two" consoles, both which are boasted at "media centers" as well as game consoles. Nintendo WANTS different - it is what works for them - and seemingly they were right.
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