Yeah the DSLR video cam, I got involved in some heated debates a while ago about this topic. Except if you film a very interesting incident which will be appreciated on Youtube(and which you can film with your phone anyway) I do not know why they have even bothered. I am sure they would have been able to sell/produce the 5D II at a much cheaper price without the video feature.
Becuase there are plenty of people who want good quality video and stills while not carrying a lot of gear? In all honesty I very much doubt the camera would have been much cheaper without the video... as has already been mentioned, it's just an extension of existing technology, very much an exercise in software development with a little hardware.
As to why they bothered? It's a unique selling feature in a market rapidly filling with full frame cameras.