The Wii and Wii U don't play DVDs or CDs. I don't think its really hurt Nintendo's business. Heck, the latest revision of the Wii doesn't even play GameCube games.
If you use your PS3 for CDs and media streaming right now, why wouldn't you keep using it in the future? The PS4 does not play PS1/2/3 games so anyone who buys a gaming console for the purpose of gaming will still want to keep their PS3 around. If space is at a premium in your home theater then I can understand that, but if space is at a premium then most likely you have another device that can do the job.
The argument that was made back in June/July around E3 was that the big difference between the two next gen consoles was the game lineups and what mattered more to gamers. I don't understand why that argument is hijacked by "it doesn't play CDs." The fact that they're trying to force people to buy a subscription to Music Unlimited is shady and I understand being unhappy about that, but not playing MP3s off external memory is not really a game changer for me.
If you were to buy a PS4 at launch, what games would you have gotten? It's a gaming console made for the purpose of playing games, so what games were making it interesting to you? Or were you looking at it for its non-gaming functions?
As I said previously, I bought the PS3 as a media player first, and got into gaming. My situation is a bit different. I have my PS3 away from the main hometheater and use it for everything I watch, listen too and gaming. My plan was to upgrade the old bluray player (with no external media sharing) in the living room with a PS4 instead of going with another bluray player since I planned on going next gen eventually anyway. I would use my PS3 as my main player, and the PS4 in the other hometheater. Once I got caught up on games, I could swap them out. Have the best of both worlds. With the current limitations on the PS4, that no longer works. Dumb move.
So I planned on no games at launch, other than the free ones offered on PS+. The only game I planned to pick up eventually was Pinball Arcade (once rumoured a launch title, now I'm not sure), and only because it would upgrade the tables I already own on the PS3. Eventually a golf game will come out, I'd buy that too since I can get my infirm father to maybe play it, along with Pinball arcade.
Yes, a standard bluray player will meet my needs, and probably will if Sony doesn't make a formal announcement on the media issues before Christmas. the disappointment is that the PS3 really is an all in one machine, doing some things better than others obviously, but still an all in one machine. That the PS4, made by a multimedia company, is taking a step back from that still seems incredibly dumb to me. It could of been a "must own" media device. Now it's simply a game platform.
Now, it's easy to say that Sony want to put out a gaming system first, but that's ignoring the real reason for it's limitations: Greed. they advertised being able to listen to "your own music" (I'm currently listening to Charley Patton, is he on MusicUnlimited?) during game play, but that's false. All the extra media features are via Sony subscription services, or licensed subscription services.
Greed and control is the reason they handcuffed the PS4, not wanting to make the best gaming system. Anyone thinking differently is kidding themselves. They saw and know how people use the PS3, sought and found a way to make more money off it.