About the smartness aspect of it:
You have set top boxes like Roku which are designed well. Hell my PS3 is fairly easy to use. The previous generation of the LG smart TVs were also pretty good without having to deal with the gestures.
As for dealing with switching the inputs, many older TVs and computer monitors come with a simple enough mechanism to switch between various inputs. This particular article may be about regression in the UI.
There is nothing "new" Apple can do here. If they end up doing something it will not be not that far off from existing and very functional UIs.
If Apple does something here, I guarantee you that you will be wrong.
The big thing is the if. Apple isn't going to enter this space to create another "me, too" product. They are only going to enter the space if they can do to TV what the iPhone did to mobile phones.
A lot of people think Jobs' implied that they had figured out the TV interface. I hope so, because I'm with a large majority of others in this thread: current "smart TV" is stupid and completely lacks imagination.
Samsung's smart tv was a fantastic experience for me personally -- in fact it made me regret I hadn't bought a TV sooner. UN55F6300 was the model we had (and, after ~6 months parted ways with to go back to our ipad) and enjoyed every minute of it.
There were some caveats like the keyboard on the remote not working inside some 3rd party apps. that the TV allowed you to install.
As for dealing with switching the inputs, many older TVs and computer monitors come with a simple enough mechanism to switch between various inputs. This particular article may be about regression in the UI.
There is nothing "new" Apple can do here. If they end up doing something it will not be not that far off from existing and very functional UIs.