Your post is an exquisite cornucopia of fail. "ARM can play..." but "ARM can't". Thinking an iPad is a representative example of all ARM chips or thinking it is representative of anything more than a toolbag's status symbol. Newsflash, numerous ARM SoCs (including those used in mainstream Android phones) include hardware video decoding for MPEG-2 and MPEG-4, and many of these ARM based chips can easily decode MPEG-2 in software and can DMA that to the display.
I would actually be surprised if the iPad couldn't easily decode MPEG-4, because I thought they designed a custom ARM SoC for that thing. But then again, I always assumed it was a piece of shit anyway.