Actually, the misunderstanding is yours. Technical issues are a small part of the challenge. The 'iPlayer' is not the product, for the most part, the content is.
Because UK competitors are not going to provide the BBC any content, and they don't have the kind financing to buy from the US, who even then were not up for this kind of deal and it took an incredible bit of BD innovation by Netflix to even get that going. The BBC would have been be able to put its own content on the web, and not much more, which is not much of an innovation.
Finally, there's a good reason the BBC's charter is limiting in scope, like any other business, how would you like it if you were suddenly found out of a job because someone with incredible power in the government was able to waive their hands, raise taxes/fees thereby 'forcing customers to exist' for their competing product, which is probably inferior by virtue of the fact they don't actually have to provide much value at all and can continue on with their guaranteed revenue stream?
That’s not entirely fair IMO. The BBC already had deals with ITV and Channel 4 to put their content on the new Project Kangaroo service before it was killed off.
It's fair because there's an underlying competitive issue: if said new project represented in any way a threat to those other entities, they would not, or stop providing the content.
For example, Disney has pulled their content from Netflix.