There are many problems with DRM, which are worth exploring here.
DTCP-IP is DRM
First, let's get some terminology right. Microsoft defines DRM as "Any technology used to protect the interests of owners of content and services (such as copyright owners)". Cory Doctorow, formerly of the EFF, defines DRM as "technology designed to give control of a device to someone other than its owner". By either of these widely-accepted definitions, DTCP-IP is DRM.
Intel tells us that "Nobody is mis-defining DRM, but some folks have decided to extend the definition. We like to look at it as the pathway to get premium content down to a PC."
Intel is desperate not to be tarred with the negative press and connotations that come with the label of 'DRM'. This is part of its larger strategy, as I will show, of appearing to be DRM-agnostic. Intel does not want to appear to accept responsibility for limiting the user experience: what it is saying is, "Don't shoot us, we're just the messengers." It does not want to admit that it is enabling DRM, which makes it, in the eyes of many, just as bad as those protecting their content with it.
DRM has a hell of a lot of problems
Regardless of the utopian content-moving future Intel envisages, the best indication of the future is the present and the past. If we look at what DRM actually is today, it is a maze of annoying restrictions on what you can do with your content, and I suggest that that is not about to change.
The problem with DRM is that any DRM is worse than the situation we have now. Right now, you can watch high-valued premium content like 24 on your network TV, then you can download a version from BitTorrent under fair use rules (or, at the very least, you can record it yourself from the network and then encode it, the difference is in technicalities). You can then move that file around to anywhere you want it: if you want to re-encode it for iPod, or PSP, you can. If you want to throw it over the network to your wife's machine, you can. Considering what you can or can't do with the content is simply not something that occurs: it's your content, you can do with it what you like, legally.
Even the mildest DRM causes you to stop and think: "Is what I'm doing with this content OK by the DRM enforcer? Am I going against their wishes - is what I'm trying to do going to work?" This puts the consumer in a worse position, and jars with Intel's stated goals of making Viiv a user-friendly experience.
DRM can be used to deny legal rights
Under the constitution and the case law laid down in the United States, you have a right to do things with your content. DRM can be used to deny you those rights.
Content owning companies are looking towards the future. It is without doubt that, in the future, content is going to be distributed digitally. You won't have a cable or satellite subscription any more: all your content will come over the internet. You won't buy CDs: you'll download them. When that day happens, your legal rights won't be worth squat, because the DRM on the content will restrict what you can do.
One day, you won't have the choice of going to the store and buying a CD to rip and do with as you please: the content will only be available to get over the net, on their terms. And guess what? If you hack the DRM to make full use of your legal rights to utilise your content, you will be a criminal under the DMCA.
DRM attempts to move the legal goalposts without going through proper legal channels for doing so. This makes for a bad user experience.
Digital content, for the most part, is worse quality.
Whether this is true tomorrow we don't know, but it is certainly true today. You can either buy a CD and rip it losslessly to awesome quality, or download a crappy 128kbit MP3 of the same thing that is protected. Why would you pay for the restriction, on worse quality?
The simple matter is that DRM is a bad thing for the consumer, because it takes away your legal rights over your content and reduces what you can do with it. Intel is enabling DRM by pushing the DTCP-IP protocol as a standard. This does not tie in with Intel's stated aims of making for a great user experience on their hardware. Therefore, Intel's work on DTCP-IP is a bad thing for its consumers.
Let's move on to look at other issues with DTCP-IP.