I'm sure there are economic incentives all over the place here. Plus some content providers own the hardware that plays it. (The hated-of-late Sony comes to mind.) Personally, I'm ignoring all digital streaming to display devices and audio amplifiers/speakers. I never used that before, and I won't miss it now.
The 360's HDD is said to be 20 GB, but shows 12 GB free before you save, download or rip anything. There's some content already there (music, videos, Hexic game . . .), but I have not tried to total up the space it eats. If you get the HD rental of Superman Returns, that's 7 GB all by itself. Yeah, they really need to up the size of the HDD in the future. It's not as if they couldn't market it for the exact same price either. Who the hell would pay $100 for a 20GB drive, except for a proprietary console.