According to TCRF, the Wii was originally slated to have DVD playback built into the system. (Read here: http://tcrf.net/Wii)I had always figured that when Nintendo initially announced a dongle for the Wii to allow DVD playback that they wanted to offer the option to those willing to pay for it (because royalties are what keep them away from adding them by default and not everyone uses a game console for media playback).
He's talking about this:
http://www.ign.com/articles/2006/03/08/revolutions-attachable-dvd-drive
http://www.ign.com/articles/2005/09/12/igncubes-nintendo-revolution-faq?page=2
Originally, Nintendo said you'd be able to play DVD's on the "Revolution", but it would be a separate add-on.
Companies avoid paying media royalties various ways.
-The original Xbox required a remote to play DVDs. They probably only paid royalties per remote sold.
-Xbox 360 and PS3 require an additional download to play certain media formats. Again, only pay royalty per download.
I use PS3 Media Center to stream video/music to my PS3 and Xbox 360. Hope you'll be able to do something similar with the Wii U.