Well, HTPC builders/users are certainly very happy.
Also, I assumed they (the press release you quoted) were indeed talking about D-VHS machines, some of which utilize HDMI and would have presumably been subjected to the flag. (JVC, for example calls their D-VHS machines "Digital VHS VCRs")
HDMI-enabled D-VHS machine from JVC
I actually can't see how this isn't good for the consumer - though I certainly don't purport to know everything there is to know about the topic. I
do know, that downconverting the signal to 480p component is a sure-fire way to lose viewers/customers for any company/broadcaster who would care to try it.
I'm watching this play out with much interest.