How would it be an IT nightmare? Its trivial to set up a pile of 5GHz wireless access points (23 possible non-overlapping channels for 802.11n in the 5GHz band) that could easily provide enough bandwidth to serve up HD content held on webservers with solid state storage onboard the aircraft. A single embedded PC with solid state storage has no trouble pumping out 400+ HD streams with plenty of power to spare in a <100W envelope.

The level of complexity involves pales in comparison to the current systems which require networking to be run to every seat, an actual computer and LCD in the seatback, and the electrical infrastructure to support such.

I suspect customers could either view the content through a web-browser (a sort of pay-per-view version of Youtube) using Flash or HTML5 on their device, or through a custom app which is downloaded for iOS, Android, and BB10 platforms.

Also the same servers could provide web pages that show a representation of the current flight stats, and even the ability to remotely order and pay for things like drinks, duty free, and other amenities (ie: potentially in-flight upgrades, arrival lounge access, etc.), to be delivered to the seats by the FA's (like they do on Virgin America).