Appears no one really looked at mpeg-2 compression.
Frame 1 is compressed and sent, frame 2 is compared to frame 1 and the differences are extracted, compressed and sent. 3 to 2 and so one for a whole bunch of frames, eventually the cycle is started over and a full frame is sent.
On playback the full frame is displayed, the next partial frame is added to previous displayed frame and the new frame is displayed. Going forward is simple along with the compensation.
Going backward not simple. Remove the last frame and the picture will have "holes" in it, so the program has to jump back to the last full frame. How far depends on where you start. Then try to get the compensation right. NOT EASY!
Lots of code and processing cycles, all while trying to record 2 shows in the background.
That is all true but should be irrelevant. These boxes always resume playback from (or pause on) an I-Frame (the "full" frame)... ever notice that you can't always pause exactly where you want to? The buffering you refer to is a normal part of the MPEG decoding process... it's ALWAYS required to assemble the GOPs (Groups Of Pictures... the set of frames assembled from an initial I frame and subsequent P and B "difference" frames). It doesn't matter to the frame buffering process whether you resume playback at the nearest I frame relative to when play button is pressed or whether it picks up the stream from the hard drive some number of I-Frames earlier.
As someone already mentioned, the most damning evidence that it is NOT a buffering resource issue is that the exact same functionality is still there in the form of the Replay button... as well as the fact that the feature has been supported perfectly well by a variety of hardware for many years.
The situation is certainly different for On Demand / Start Over type programming... especially for non-DVR boxes. For those situations, I can see it being either a buffering or command and control nightmare... or both. It wouldn't surprise me to learn that this is a prerequisite step leading to grander set of cloud/server based offerings.