I wouldn't consider PRICES to be innovations.
I do think that streaming media has made a significant impact on the industry, and that has definitely taken off in the last 5 yrs. Over half of the content I enjoy now either streamed or watched via DVR. Definitely NOT the case 5 yrs ago.
Control has also made very large strides. iPhone/iPad control, wifi/zigbee interfaces, even the newer gesture stuff... many great things coming to the home theater in that regard.
What about gaming? I think back to when I camped outside Walmart in 2007 for the release of the PS3... never did I think I'd be using that same platform, REGULARLY, for the next 5 years. Being able to update games, download upgrades and add-ons, and use them as media centers makes them incredibly valuable and versatile home theater products.
And, though I'm equipped to use it and never do, I still think 3D needs to be recognized. It may not be everyone's cup of tea... but the availability of both content and price points have made it accessible to the average consumer.