I understand all the points you are making. Nevertheless, I don’t want to do the extra work of popping the additional Blu-Ray in, finding the best encoding settings and so on - It’s all extra time and simply put, I don’t want to spend it. Especially for users, that don’t really care too much about quality.
If now Plex would offer a way to make an optimized copy of my 4K UHD HDRs for SDR Playback, I would be happy with it, since I don’t have to do any extra work. It does not have to happen in realtime. But tone-mapping is crucial for this.
With the right hardware (e.g. the 1660 with unlocked drivers) real-time transcoding should also not be a problem, though, and it would be nice to have this working as a fool proof solution, with no extra work. Electricity is not an issue, since my use-case is max. 3 remote streams, that require transcoding. And hardware transcoding is also pretty efficient.
Your comment regarding storage prices neglects hardware cost besides the initial drive, which involves backup (My setup is one local and one remote NAS - local NAS is 16x8TB as two raid6 storage pools - external NAS has to offer the same storage space for backup reasons), so I would at least double your costs. But of course you are right, hard drives are cheap nowadays.
