Well, there is a licensing restriction for any device that possesses an HDCP-compliant digital input: it is not allowed to have any kind of output except a) a digital output that is also HDCP encrypted, or b) a standard definition analogue output. So you could have a device that accepts HDCP-encrypted digital hi-def, downscales the signal from 1920x1080 to 720x480, and then outputs that over component; but not one that produces a high-definition component output.
There are all sorts of finicky licensing rules like this. If a DVD player has an HDMI output, for example, then it's against the licensing agreement to allow non-HDCP-encrypted digital output from it.