Above all remember Hanlon's Razor: "Never attribute to malice that which is adequately explained by stupidity.":
1) LG's response from their CS department was composed by a minimum wage agent who got a response from their mid-level supervisor who enquired with someone in product management who badly translated that from some Korean discussions.
2) Most Koreans don't care about content piracy, it is rife in Korea, especially with their excellent bandwidth.
3) Most of these policies were probably written by someone more interested in making the best product for the least money and probably not someone from the west.
I would hope that LG might pick up on this and make a better statement, but it won't change their attitude.
Finally, personally as someone who makes a lot of set-top boxes I would happily see more dumb TVs, but the business of TVs is loss making. None of the big brands has made money in the TV business in ages, most people do it either for turn-over or brand recognition. Making basic large "monitors" is a difficult business to make a profit in because you are selling something very basic in a mature market.
What subsidized product? I just paid hundreds to thousands for something you advertise as a smart tv.