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It's not such a dumb idea IMHO. Ethernet is very cheap to add these days. With a new format, especially one as complex as HD-DVD, I wouldn't be at all surprised to see some early compatibility problems just like we did for DVD, so a mechanism to upgrade the player via a PC could be quite handy.
Also, very few PCs will have HD-DVD drives for a while yet, so it theoretically provides a way to distribute PC-based content on HD-DVD discs with a way to actually get the data into a PC.
Wasn't one of the design objectives for AACS (the HD-DVD / blu-ray encryption system) to allow video to be streamed to other devices? Recognition, at least to some extent, that people demand more flexibility than 'one disc, one copy, one place'.
I wouldn't be surprised to hear it's for license checking. Also, with the current range of DVD's interactive features requiring a PC and web access, some kind of access to online content to non pc owners is probably likely.