Especially the part where they start talking about the texture formats and audio tech being baked into the Xbox One's chip.
Or do I really need to do a Youtube embed that starts the video right when they make that statement?
Baking the texture format and audio decompression into the chip just means it takes less speed to decompress the image and audio assets to be used on the Xbox One, when the Xbox 360 game needs it. So that decision was made to gain a speed advantage. If you had enough CPU power you could decompress the 360 textures and audio assets in software. Eg. On a high end PC for instance. So no need for it to be in HW except it frees up the X1 CPU to do other important stuff
So in short when you say ...
Rather. It can't.
You can run it ALL on a PC and I believe that by the next gen, we will see that happening. And if Microsoft decide to go via the Xbox PC route, as I mentioned previously, they could "bake" stuff into that HW too, to speed up those aspects of emulation, but they don't have to, if they don't want to or think it will be harder to update the firmware.
While we are here, please tell me how many years of software development experience you have and how many compression or decompression routines you've tried to write over the last 20+ years. Or how many game development APIs you've worked on?
To give you a hint of my background.... game development APIs I've worked on (actually lead the team for 3-4 years, not doing so anymore) has been used in games such as Bastion, Fez to name 2. The code worked on Windows, Mac, Linux, iOS and Android. So a variety of processors and platforms. The team currently heading up that codebase now has it running on Xbox One, PS4, PSVita and recently Switch. I'd like to think I know a little about game dev and what is and isn't possible on both the HW and SW side of the equation.