I find the un-encrypted part to be a bit odd though. Its simply transmitting data, and the wire/connector shouldnt care about the data being encrypted or not. It would seem like the only thing to do would be to have a step for encryption before transmission takes place.
Anyway, I have had plenty of experience at home with the old antennas and such using BNC connectors. Not that particular style, but the idea is still the same as is stated.
The wire doesnt care, MPAA/whatever studios care. They have to have their thumb on the consumers, demanding that the link between the source and the display is encrypted. Want to hook up your blu-ray player up to an old LCD with a DVI input that you have for your workshop via an HDMI-DVI adapter? Too bad, if its not HDCP encryption enabled youre out of luck, go buy another monitor. Youre not to be trusted, and have to play by their rules to watch their precious movie.
Nevermind the fact that pretty much every encryption scheme that is devised to protect tv/movies/etc can get cracked usually within weeks, definitely within a year of its release

So its not going to hinder piracy at all, just consumer fair use.