The hardware may not allow for PCM, but LPCM may be possible; and folks like you and I could be the driving force behind a downloadable app to do just that, and more. I think the Android Market is the key to seeing Googles' and our own visions converge into one do-it-all device.
All it would take is an affordable Media Center app to interface with our Windows Media Center systems and/or media servers directly. Apps like that already exist, but they're all proprietary crap that is reserved for the "professional integrators" and their customers who have money to burn.
Imagine, for a moment, a complete media interface that offers the same experience on your iPhone, your wife's Android Phone, your son's Win7 tablet, your daughter's laptop, and the GoogleTV boxes underneath each of your displays... THAT is what I'm dreaming about.
If you build it, they will come...