From AT&T and Dish's point of view, what's the point of having a service like Locast out there if you're afraid to make it useful? Having it locked away in an "app" means hardly anyone will ever use it. You have to start up an app and you're forced to watch LIVE? Screw that, that's hardly better than not having the channel at all as far as I'm concerned.
Its like you had a machine to turn lead into gold but you're afraid the government make your machine illegal and take it away, so you decide you will only convert one ounce of lead into gold a year. Might as well not have it at all then. Convert a ton of lead and then you'll know where you really stand.
I don't think AT&T really ever expects customers (using their current TV packages) to use Locast except in cases where there's a blackout. (Just saw this morning, BTW, that my local ABC affiliate owned by Nexstar is in a standoff with all of AT&T's systems and may go dark soon.) Just as in the same way, AT&T doesn't expect their customers to use the LCC for OTA locals unless there's a dispute (which is why those situations are the only instances in which AT&T will send the LCC out, apparently).
For DISH customers, I can see Locast being a little more useful because DISH does offer the option not to take locals as part of your package and therefore pay less. My hunch is that AT&T has not negotiated the ability to make locals optional with their restructured channel packages (Plus, Max) with the exception of the line-up offered on AT&T Watch TV, which doesn't include any networks owned by ABC, NBC, CBS or Fox; getting your locals isn't even an option with that package.
Specifically to your question about Locast's streams being locked away inside their own app, that's Locast's decision to make, not AT&T's or DISH's. When I watch Netflix on my Apple TV box, do you think Apple has the capability to hijack Netflix's streams and integrate them into Apple's own TV app? No, of course not. I have to launch the Netflix app and watch the streams there. If Locast wanted to, for whatever reason, yes, they could have their coders work with the coders at AT&T and DISH to let their streams pass through to the native UIs of those boxes, I guess. Or, short of that, they could allow AT&T and DISH's boxes to deep-link to the relevant streams inside the Locast app; this wouldn't be seamless but it would allow the user to select a local channel from the native channel grid guide and then be taken directly to the live stream inside the Locast app.
What's a reason that Locast might choose not to cooperate so closely with DTV or DISH in that way? Well, if Locast takes a $500,000 "donation" from for-profit AT&T and then turns around and "gives" them something of value (something that isn't given to the general public, such as customizations specific to AT&T's proprietary boxes), that looks a little fishy, doesn't it? Might endanger their non-profit status, which is how Locast can get away with doing what they're doing.
