The Judges who ruled in favor of that should have been investigated for corruption. It made zero sense, and in my opinion, failed the "follow the money" test.
The historical roots here are the community-access television (CATV) systems of the 1970s. CATV systems were legal at that time, and the Court acknowledged similarities between what Aereo did and what CATV did. But the Court was stuck with the fact that Congress had explicitly amended the Copyright Act to say that a CATV-style system was considered to "perform" the copyrighted programs it passed on to viewers. Which in turn left the Court without much choice as to whether Aereo was "performing" the programs viewed by its customers.
Laws are passed by the ream, and these all provide definitions for the things they're regulating. The whole point of including those definitions is to clearly delineate the boundaries of each bill or regulation. And because they each have their own definition, when taken together you'll always find overlaps that cause strange interactions, or places where there areas between defined domains allow creative loopholes. Thus it's not at all surprising that a pair of regulations, one governing cable TV and one covering data services, have definitions different enough that someone can get stuck on the wrong side of both of them.
It does create a mess, and that's part of what the recent King v Burwell decision was about. The PPACA clearly defined its terms, but in ways the Obama Administration (specifically the IRS) thought didn't make sense, and so they did their own thing. The decision was necessary to resolve the contradiction. This kind of thing will always be the result when legislators or regulators are being driven by political concerns, and especially when their work is rushed and they don't even allow time for experts to read and understand the bills.
What we're seeing is that being worked out in court cases, Congress, FCC proceedings and Copyright Office proceedings.
It will get worked out but my opinion is that it will need Congress to intervene eventually.
Agreed on that. When cloud DVR is legal but cloud DVR+antenna is illegal, something has gone belly-up.