Unfortunately their restrictions aren't arbitrary, they are likely contractual. TV has 50+ years of history of complicated content distribution rights. They involve lots of contracts and lawyers who make sure everyone involved in creating a TV show get paid. In general all of these contractual rights get in the way of things like newly emerging technologies, but without these contracts we probably wouldn't have any of the rich content available on TV today.
Content producers make new content. Then they sell the rights to TV networks to broadcast the content over their TV networks in contracts in which all of the writers, actors, crew, etc. get paid every time that show airs. Within the last 5 years or so content producers are also selling Internet broadcasting rights to Hulu and other websites, but the economics are quite different because you can technically watch any show at any time on demand over the Internet. Not to mention the immaturity of Internet video advertising which likely makes the pricing of the ads much different as well.
Now when there is an easy way for an Internet broadcast to show up on someone's TV (like with Boxee), all of a sudden there is somewhat of a gray area as to what contract should be honored and what residuals should be paid. When the contracts were made the content producers were probably thinking, "OK, I get paid X when someone watches my show on TV and Y when someone watches it on a computer." When they found out that people could watch an Internet broadcast easily on their TV in their living room, they probably had their lawyers call Hulu's lawyers so that they could work out the details. Hulu's lawyers probably came up with the idea that the easiest thing to do in the short term was to attempt to disallow the easy way for people to watch Internet broadcast content on their TV. No this isn't very friendly to the viewer, but they are likely more concerned with their contractual obligations with the content providers than they are with pissing off a small set of tech savvy viewers.