I did the same (but my screen is taller than yours is large :P), but I think there are a few reason why this hasn't seen larger adoption.

People like to have their TV on all day long: with a projector you can't, because it won't be very visible in daylight and it will burn through lamps like it's popcorn.

Second point, modern TVs usually have a tuner in, you plug them in and they work. Also you don't need to adjust the image until it's rectangular.

You don't need to have a line of sight for a TV, chairs and people are not an issue.

You are right that of course, not everybody has my usage pattern. Since my daughter becomes a mindless, staring zombie whenever a TV is running in her field of vision, we only watch TV late in the evening (for us, a lamp lasts about two years).

Before I first set it up, I expected the configuration to be a lot more tedious than it actually was. If you have the computer, some sort of sound system and your TV receiver lying around, all you need is a switch for the different audio sources and you can basically plug it all together. (In my setup, TV does not go through the computer. We don't have Hulu, HBO or Netflix over here.)

I'd say about 80% of the work was mounting the beamer to the ceiling and getting the upper hand on the cable mess.

With many (most?) cable companies now encrypting even "basic" channels, you need to use their box to watch anything. At that point, you don't need a tuner, unless you're actually receiving over-the-air broadcast TV.

Because contrast and brightness are much higher on televisons.

Also, televisons often offer more features like usb, networking, sound and cec. I'm not entirely sure about most beamers, but I don't believe they offer the same integration with a chromecast or raspbmc that my current 500 euro sharp aquos does.

my setup is a Samsung 42" TV + AppleTV + a PS4. The colours and clarify are amazing (the sound isn't)

I use the TV for BBC iPlayer, Netflix, and Viki (I'm into asian soap operas) I use the Apple TV for Youtube, The PS4 is for Battlefield 4, I use Airplay for anything else

A couple of friend of mine have have gone with that solution and to be perfectly honest the bad image quality really annoys me on the cheap setups. The one setup that I've seen and liked cost in excesses of 2500€. I'd much rather have a 40" TV with the best image quality possible than a crappy 80" image from a cheap projector.

At my office they replaced the beamers with big ctouch touchscreens. It's a huge improvement even at the smaller diagonal because of the clear and sharp image. Plus, it's cool to stand there pulling stuff across the screen minority report style.

Try watching a projected picture on a canvas in brightly lit room. It can be difficult to view it if the room is not dimly lit.

TV is still king in these situations.

Cables, for one. Most living rooms already have antenna plugs and power in one convenient wall or corner, where the TV is supposed to be located. The beamer needs to be opposite of this position (to beam at it). To not cast shadows, it will commonly need to be placed high. Not very popular with wifes, this setup.

Ok, I was lucky in that regard. Now it looks all neat, but the first time I set it up I was really, really sloppy. Fortunately my wife is a lab-hardened scientist, so the conversation went like this:

Me: "Do you mind if I nail these cables to the walls in our living room?"

Her: "Whatever. Just be done by tonight so we can watch something."

This time, I worked with well-hidden cable conduits and it is not that noticeable any more.

The fan noise for a projector can get fairly annoying.

Although your brain erases the noise after a while, it is indeed pretty annoying.

I mentioned that I used a sound system. That is actually not quite accurate any more, since we had to make some adjustments when my daughter was born.

At the time, we were living with an unfortunate flat layout which placed the bedroom directly next to the living room. So in order to avoid waking up the child, we started using headphones (and have never stopped doing so since).

Since I had checked before buying the beamer that it wasn't too loud, using (good) headphones had the side-effect that beamer noise is now an absolute non-issue for us.

I find it enlightening how all these responses show that my setup really isn't the right thing for everybody. In retrospect, I was also not consciously aware of all the quirks that my wife and I were willing to accept (headphones, cable conduits, TV only in the evening).

Nonetheless, as beamers become brighter and less noisy (LED?), they will probably become attractive to a wider range of people.

Because projectors in a given price range have much lower image quality (contrast in particular) than TVs in the same price range.