It isn't insane when you consider MPEG4 cable boxes aren't even out yet, and when they are will probably cost (to the operator) 2 times the cost of a TVDrive.
How many people would take the NTL PVR if it was leased out at £20/month and there was a £10 charge for the Sky HD channels.
Top SkyHD package - £299, plus £52.50/month
NTL HD - free, family+sports+movies is £52, rental of the more expensive box plus £10 for HD channels and you could be looking at £80 odd a month.