This is exactly what I was talking about. You are so secure in your knowledge. Yet have you actually sat down and done the math?
I know it's possible because I did it, so I know that if you actually did the math it would have to be possible. There is a huge difference in what it takes to decode and display a video on top of a multi-user general purpose software stack mostly written in ultra-high languages and essentially unoptimised, versus what is actually possible given a highly optimised decoder running without interference on the bare hardware.
Even given the significant increases in resolution, and the modern codecs which require quite a bit more processor time, the increase in demand on the hardware is orders of magnitude off in comparison to the actual increase we have seen in hardware capability over time. That 386 ran at 16mghz and it was overclocked to do it, and clock for clock it was vastly inferior to your ARM11 which is running at over 60 times the clock frequency. Not to mention having 512 times the RAM on a much faster system bus...
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