Most graphics cards these days focus on the gaming side of things, while the GPU's in the Blu-Ray players focus on the upscaling to 1080p. (At least this was what I read in other forums)
It's not that graphics cards nowadays focus on gaming. Rather, gaming gets more attention when reviewing video cards because it strains the cards more than decoding. Some low-end and mid-range video cards are as capable as decoding video as those high end cards.
ATI(AMD) has had focus on the video market for some time, and the Radeon HD 4870 card I bought is directly for that market while fully supporting gaming as well. With 1GB of memory and direct HDMI output, and with all audio/video codecs licensed (DTS, THX, etc), you really have more technology and audio/video crunching bandwidth available on that card than in a dedicated player (plus with being able to play any A/V codec you want via PC). Intel recently partnered with Nvidia, so you can expect to see more competition for ATI/AMD in this space. But yes, the technology is already there. Most agree that the PS3, a gaming platform, is the best standalone player for upscaling/BD. A high percentage of PS3's were sold just as BD players.