In reality, we are looking at two different ways of looking at place-shifting content. Apple’s is directly from an iOS device or a recent Mac’s display. The Chromecast is sending instructions to the dongle to start playing content from the cloud (meaning you need a pretty healthy Internet connection).
In its present state, the $35 Amazon/Best Buy (in stock) Chromecast is a convenient way to show Netflix, YouTube and Google Play content on a TV. But a lot of the good programming lies outside of this sphere. Sure you can ‘Chromecast’ videos from your Chrome browser as you watch Hulu, Amazon Instant Video, or just about anything else that works in a browser including .MKV, MP4, AVI files, etc, but that’s not elegant (and Chrome/Android chief Pachai says websites, like Hulu, could turn off the functionality at any time)! Also, you get no dedicated remote with the Chromecast (though Android devices can be found pretty absurdly cheap) like with the AppleTV.
You can’t help but wonder if the Apple TV could be put in the Dongle format and perhaps given some more content sharing options. Google reached across the aisle and built Chromecast to provide Apple Mac and iOS users the same compatibility as Chrome and Android users. Sure Chromecast needs external power such as that provided by a USB port, but the form factor and, more importantly, the price, seem very compelling. If Apple could squeeze its current format Apple TV into a dongle and cut the price in half, why shouldn’t it?
Update: Search Engine Land simplifies and throws in Roku for good measure