They are not limitations of Vista. They are limitations of DRM. I now believe with the vast majority of uninformed people blaming Microsoft for the restrictions of DRM that Microsoft simply should've never supported playback of such content. Complying with AACS standards might turn out to be a nightmare.
The DRM isn't as restrictive nor as hard to break as everyone says that it is, it has already been broken. do some research.
So why doesn't Microsoft make their case to the general public? They do a really poor job of that. It should not be Microsoft's problem to enforce DRM, but they should at least explain their position to their customers.
Indeed. The RIAA cartel threatened to make their next generations of offerings incompatible with computer playback if Microsoft didn't comply. Given how much that would have affected the RIAA and how little that would have affected Microsoft, this was equivalent to caving in to the self-hostage-taking ploy from Blazing Saddles.
The thing that puzzles me is why playing a DVD would require decrypting the data from the DVD and then re-encrypting it for the display? Wouldn't it make more sense to design a standard method for the computer to exchange information between the display and DVD player and have the display handle all the decryption? This would eliminate the risk of people reverse-engineering the PC code, since the PC code wouldn't have any ability to decrypt anything anyway.