Actually, unencrypted component, which is an analog signal, is allowed, but unencrypted digital connections (DVI, basically) are not. I don't know why none of the upconvert DVD players have component output, and they may be wary of the encryption restriction, but I bet it has more to do with DACs being expensive. Another possibility is that the benefits of upconvert may be lost when the signal is travelling analogically instead of digitally.