I think you misinterpreted my comments. I said exactly what you reiterated.
1. DBS can't decide (by law) who they do or do not allow to have DNS; they do not determine that.
2. They can decide what LIL markets they want to rebroadcast on their system and when.
Yes, apologies, I did misinterpret your comment.
I suspect that being forced into doing LIL will turn out to be a good thing for DirecTV in the end. Although many people would be perfectly happy (and may even prefer) national HD network channels, most people want to see their local stations and might choose to go to cable if DirecTV did not offer LILs.
I think it is a pity DirecTV could not do a deal where the national networks could be available to anyone who also subscribed to LIL, but at an additional charge, which DirecTV would have to pay to the local affiliates.