You're wrong on all counts.
The only issue affecting wide spread of VOD is not technical but licensing. Always late to embrace new technologies, the studios don't want to kill their DVD cash cow. But the release window is closing.
VOD will gain acceptance with TV shows and then slowly but surely you will not remember a time when you had to go the video store- and then make a return trip, or wait for the mail to arrive.
Look at just one cable company's VOD offering today.
http://www.io.tv/index.jhtml?pageType=movies
HDTV does not require anything above what any HDTV cable or telecom viewers already need to use.