The minimum a console needs to get acceptance in the market is to play a couple popular games like Assassin's Creed, Call of Duty, Battlelfield, FIFA/PES. Even the WiiU supported some (well, Nintendo's different). An Apple TV hardware is FAR from doing it.
If Apple leveled the hardware to it, keeping their astronomical profit margin would be impossible without charging 800-900 USD. Remember: ALL consoles are sold at pratically no profit, some even lower than it's cost. Sony, Microsoft and Nintendo make up for it with games.
Apple could very well do it, having the biggest application store in the world with a 30% cut of anything in it but, again, it's something they NEVER did before: to reduce the profit margin on hardware.
Console player do value their money. It's even the main point over the PC x Console wars.