What you're paying for is the ungodly number of parts needed to manufacture a cable squid that will collect dust within a few years. Did you see that video where they "explode" the device?
The Apple TV is cheap because there's probably a total of five screws inside that small black case. It probably takes all of three minutes to assemble one.
I appreciate good industrial design, but the Apple TV -- for all its software limitations -- is far more beautiful because of its simplicity and reserve.
The Nexus Q "cable squid" is cute, but so was the PowerMac G4 Cube ... and look how well that sold.