Pretty much. We already have two distinct areas for watching content. One is for casual content like television shows. It has a 30" TV with only the TV's built-in sound. The other is for watching movies. It has a projector, a 100" screen, and a surround sound system.
Both are technically capable of both functions; both have Blu-ray players, both have Internet-connected computers. When we just want something on to sort-of pay attention to the TV is on, and we're usually doing something else at the same time. When we want to watch a movie, the laptops get put aside, the lights go down, and we actually watch the movie.
If on-demand TV through the Internet has stalled, it's probably due to an apathetic form of analysis paralysis, where there's too much to choose from so narrowing-down the scope is hard to do. By contrast, when content is being 'streamed' (ie, broadcast) whether one makes a selection or not, it's a lot easier to apathetically leave that content on, reducing or eliminating the need to make a decision. Think about it, would most of those crappy mid-day shows exist if people had to actually choose to watch them? I don't think they would, people would simply not bother to select them. Same goes for a lot of the gossip shows like Extra and Entertainment Tonight, most people don't seem to seek-out gossip and only really participate because it's right in front of them. Make them have to choose and that probably won't be their choice.