[noggin]

I don't use additional programs like PowerDVD but am I understanding correctly that they do support hardware MCV MKV output the same way the Pi does?

I believe so. I believe that 3D MVC decode for the major players is implemented, and if you look in the video drivers on some PC GPUs you see a 3D option, which I assume will kick in 3D Frame Packed Output. I've not really tried this stuff so can't comment with authority

Not only the output but the ability to communicate with the display to auto-switch and the like?

No real need to communicate with the display per se. If the display supports it (which it tells the GPU via EDID down the HDMI Cable) you just switch as and when you want I believe. The display is expected to cope with a change in input format and sync to it automatically. It's a case of the driver and app on the PC communicating rather than the PC and the display (post-EDID).

At the end of the day it still seems rather silly that so much in the world of HTPC is out there and "free" and for the most part easy to use but for some reason this 1 idea is still like trying to land a man on the sun in flip-flops and a speedo. I can buy a $1000 Titan X and game at ridiculous resolutions but that same card can't do what the teeny-tiny Pi can.

I suspect the hardware can, and with a Windows proprietary solution so can the software. (Just as it could on an i3 Intel GPU) The issue is that there isn't an Open Source-friendly solution to access 3D MVC decode (not sure about the Frame Packed output - suspect that might be more possible. But am guessing here ...)

Also, I don't know a lot about the general Pi community outside of my desire to use it with Kodi and the like. Is there any info on newer (more powerful) versions on the horizon?

No - the Pi Zero is a move almost in the opposite direction. The Pi Foundation exists to cut the cost of entry for kids learning to code, because computer science students in the 00s were less advanced when they arrived at Uni than computer science students in the 80s and early 90s. This was deemed to be because most of the 80s and 90s kids had home micros that they programmed, whilst the late 90s and 00s kids all used computers as appliances instead. (And coding on the computer your dad did his home banking on was probably less of a great idea if you broke it...)

The Pi / Pi 2 / Pi Zero was a response to this. Cheap computers that kids could use on their own and not be hugely worried about bricking.

Apparently the Pi guys were considering a higher spec machine, but decided to go lower spec to make it even cheaper, which reduces the costs of entry and allows for more embedded coding (robots etc.) at a lower price. The Pi Foundation have a lot invested in their current architecture. The Pi 2 was a clever way of developing this without killing a lot of their existing code (which they still want to support on their original SoC). Think it may be a little while before we see a Pi 3 with USB 3.0, integrated Bluetooth and WiFi, 2160/60p, HDMI 2.0 and HEVC decode... But then again. The Pi Zero kind of came from nowhere...