Should you really have to buy a brand new tv...just to get access to your favorite container format?
Since I was looking to buy a new TV anyways, yes, I did specifically look for that feature.
I mean, an Xbox is a really cheap, mass produced computer running a Linux-based (freeware as well, btw) kernel right?
Sorry, no. The Samsung TV is "a really cheap, mass produced" device "running a Linux-based... kernel".
The Xbox is "a really cheap mass produced" entertainment device "running a" proprietary slimmed down Windows kernel, that is NOT freeware.
Why shouldn't it be able to compete with a netbook?
Because a netbook *is* a PC. And a TV or the Xbox are simple entertainment devices. You can't edit an Excel spreadsheet on the Xbox either. Or a Word document. Despite both being Microsoft technologies.
... It's Microsoft's every right to refuse to make MKVs an acceptable container...
They don't refuse it. If you have Windows 7 with Media Center (i.e. every edition besides the Starter edition for small netbooks), you can simply install Divx on it, and then stream MKV files to the Xbox without problems.
I'd guess, that adding the MKV codec requires more space for the dashboard system that currently available for the system's flashrom. The Media Center Extender is an "app" that gets downloaded to the console from the Media Center PC, that just displays content.
So it IS possible with Windows 7 and Divx to watch MKV.