General theory for you:
The web browser displays HTML, which is easily displayable and copyable.
It can also run javascript, a programming language that runs inside the web browser and can easily access the web page you are viewing.
In order to "hide" the HTML they are sending your web browser, they instead encode it and send you a page which only has the encoded version and some javascript.
When the browser runs the javascript, that script decodes the HTML and sticks it in the page.
Net results: using View Source in the web browser only shows the encoded HTML.
Reason why it's stupid: Anyone can run the javascript and decode it. The only people who couldn't get around this with the most trivial of effort wouldn't be using the HTML in ways Hulu disapproved of in the first place. It's kinda like using a European keyboard on a US computer in an attempt to stop people from using it. Anybody who can type can still see the letters on the keys. The people who only used the mouse to control the music player aren't going to be able to do weird stuff with your computer anyway.