When Steve Jobs first mentioned the updated Apple TV at yesterday’s “special event,” it sent excited murmurs across the industry. Would this be the true TV 2.0 experience that consumers are asking for? It could have sent shock waves to knock Google TV, and Roku, and Boxee, and Xbox 360 on their heels. But it didn’t.

With everything good about the new device, there is something bad. So it’s good that it is smaller at a mere quarter of the size it was before. But this size reduction – a reduction that few people will care about, really – came at the cost of a hard drive, which means that you can’t store content on the device. Sure, everything will be available in HD, which makes sense, but “HD” on Apple TV is 720p, where “HD” on Xbox 360 offers instant-on 1080p. And although Apple introduced $.99 TV show rentals, they announced that there would be no purchasing content on the Apple TV, only renting, an option that is entirely un-American.

But there were two real opportunities lost. The first was not bringing the iOS to Apple TV. The reasoning behind this is likely a matter of input device – the Apple TV doesn’t have a touch interface. So a majority of apps that were developed for a touch interface would be deemed useless. But it would allow for people to develop for the device, likely casual games. And apps could be developed to use an iPhone as the remote control, basically making the gesture controls on a phone run your TV. Without iOS powering the device, it looks and feels a full generation behind http://www.google.com/tv/.

The second big opportunity lost was a lack of content. Apple is currently the most powerful consumer electronics company in the world. When Steve Jobs didn’t want Flash on the iPad, the entire world jumped on the HTML5 bandwagon. But even Apple couldn’t get more content providers on board – just NBC and FOX. This is perhaps because the revenue margins would be so low at $.99 per rental. But it also may be because they still are treating it as a hobby, investing their resources and bartering power in the devices they take more seriously.

So the new Apple TV will be nice for anyone who has always wanted to carry around a set-top box in their back pocket. But for the rest of us, Apple TV is little more than entertainment while we wait at the Apple Store for Genius Bar to tell us why our iPhones’ battery drains so quickly.