Running on HDCP content on component won't degrade quality?

I am reproducing a comment from a reader in response to my post that running HDCP-enabled HD content via analogue component output is likely to downgrade picture quality to DVD only:

HDCP is mainly for the purpose of preventing digital distribution on the Internet. It can be a matters of seconds after telecast. As such when HDCP is enabled and there is no reciprocal handshaking from the display device the digital signals. It should not affect the analogue ouput as there is a barrier to distribution on to the Internet. That is why HD Ready specifications (notably from Europe)has two outputs HDMI and Analogue Component. The picture quality from the Analsogue output is not noticeable.In the case of HDVD the jury is still out there. Some manufacturers degrade the component output some don't. Will have to keep monitoring the situation. Consumers and some industry members do not like degradation of the component output--sort short changing the consumer and will affect sales.

This opinion is consistent with some experts that I spoke with from MediaCorp and MDA. What they are saying is that even if your TV is not HDCP compliant, you can still run the HDCP-enabled HD stream thru the component cables, and you won't get any or significant degradation in picture quality. Then why bother to have HDMI if you can still get the same quality via component? The experts say that this is because it is hard to distribute analog recordings but easy to distribute digital recordings. This is an issue that I will study in greater detail.