How is that different at all from the online distribution systems that the PS3, 360, and Wii already have? The 360 has a fantastic low price indie market in Xbox Live Arcade, the PS3 does pretty well, and the Wii is steadily gaining the entire Nintendo back catalog.
What would people gain from buying yet another device, and what do you mean by a "meta console"? Something like OnLive? Because otherwise, you're not going to see anywhere near the performance that the current consoles get. While graphics don't make the game, shiny graphics do help to sell games.
"How is that different at all from the online distribution systems that the PS3, 360, and Wii already have?"
The product that the parent post describes is priced like an impulse buy ($99), has no monthly fee , integrates beautifully with millions of popular devices (Airplay with iTunes, iPads, iPhones, iPods) and Apple would make it as trivial as possible to port games/apps from their already popular platforms to the new TV format... If they indeed keep the pricing as cheap as Apple TV, it could be practically ubiquitous and the network effects for social games and Facetime-like apps would thus be a major competitive edge.
I don't think it's hard to imagine Apple disrupting the consoles. Of course, it's more likely that they'll try to stay intensely focused on their two existing platforms for the foreseeable future. Then again, I have a feeling that the merging of Android with Google TV makes the marriage of iOS and Apple TV more likely - they know that the home's "big screen" is a future battleground for these platforms.
The AppleTV is already iOS behind the scenes (and uses the same A4 chipset as the current iPhone and iPod touch). Technically, it'd be possible to run iOS games on the Apple TV nearly unmodified, and use your other iOS devices as controllers. Also, the iPad 2 will be able to do full video mirroring over the network to the Apple TV as of iOS 5; presuming the performance is up to spec it'd be possible to "invade" living room gaming that way as well.
What would people gain from buying yet another device, and what do you mean by a "meta console"? Something like OnLive? Because otherwise, you're not going to see anywhere near the performance that the current consoles get. While graphics don't make the game, shiny graphics do help to sell games.