Interesting stuff. I loved homebrew on the Wii, looking forward to seeing what people can do with the Wii U. Is the drive the same as the Wii's? As far as I know, and I may be very wrong in remembering, the Wii's drive did not use constant velocity which made it unsuitable for dvd discs. I don't know if the Wii U's one is different.
But they did get DVDs working decently on the Wii, can't see why the faster drive in the U would be worse. They may have used buffers to get around lack of constant velocity.
Anywho, I'm in the camp hoping this goes ahead. The lecture Fail0verflow did on the Wii U was interesting, unlike the Wii it uses a full Linux OS, so there's lots of room for customizing it, ie if someone were to make a Wii U OS based distro with lower RAM use or something.
I'd be interested in removing region locking with a homebrew, and being able to use that SD card slot in Wii U mode (and removing the limitations on storage in Wii mode)