Linux is GPL. I've yet to see a DRM license that is compatible with a GPL embedded system, or even LGPL in most cases (because of the reverse engineering clause).

I don't understand this at all. Oracle released a port of their database management system for Linux and it wasn't magically required to become open-source. For that matter, your own empeg player application is closed-source and no one has any problems with that. How would any other application differ?