I think the thinking here is that hard drives are cheap and ubiquitous.

I have a whole drawer full of old hard drives, and though most people don't, I'm sure a lot of boxee's eventual user base does.

Given the amount of streaming content available, I can see why they didn't include it, I think if you're likely to want to have a hard drive inside this thing, you're the kind of person who'll have very little trouble finding one and plugging it in. The less savvy users won't notice it isn't there.

I realize I'm setting up a straw man problem here: a problem that'll only exist for people with the solution already, but I simply don't see a strong case for needing a hard drive. Do you need it to store video locally? If so, then they could never have included enough space, if you're only storing a few things temporarily, they you're likely able to buy a small thumb drive & store things there. Are there other reasons to have a hard drive that I'm missing?

EDIT: never mind about the flash drive: there's an SD Card reader on the front of the thing.