I have an LG blu ray player that does netflix streaming as well as a couple of streaming pay-per-view places (vudu and cinemanow). It does pandora and some other things (like a low res verison of youtube - why can't they get HD when it's available???), AND plays from DLNA local network shares. And, of course, is a blu ray player. It sells for right around $150 on Amazon now. Why would anyone by a Boxee box for $50 more?
That said, I've actually been holding off on a new TV purchase to see what the new Sonys with Google TV built in will be like. Having web-connected services without an extra box would be awesome, especially if they truly push Android as an open platform and have lots of innovative apps. That's one thing my LG definitely can't do - they push new services through firmware updates, but it's services that they want to push. I'd much rather see a thriving and open marketplace.