It's not artificial at all. It's a real limitation that was so outrageously annoying for the reasons mentioned above that VLC was able to "win" by tackling this

It's not artificial at all. It's a real limitation that was so outrageously annoying for the reasons mentioned above that VLC was able to "win" by tackling this one issue alone. The success of vlc is all the proof you need. As you say, why else would it be so popular?