I have no idea how long this has been in place, but when I went to purchase one of my favorite episodes of Deadwood in the iTunes store, my two-dollars-and-ninety-nine-cents only earned me the HD version of the episode.
Previously, when iTunes offered an HD purchase of a TV episode or season, that purchase also included an SD quality version of the same, gratis. For me, this was perfect - the HD version for playback on my computers, Apple TVs and iPads, and the considerably smaller SD version for my mobile devices like iPhones and iPods. The storage in my 16GB iPhone is practically full, but I constantly make sure I have about two gigabytes of free space for a few episodes of something. That way, when the girlfriend and I are out shopping and she decides she wants to get her nails done, I can say "Go ahead!" It's easy then, to cozy up on a bench, watch an episode of Scandal and earn points for being a wonderful boyfriend.
Without the SD versions, I won't have any choice but to download/sync the larger HD ones. This makes sense for a majority of Apple devices, but not for the iPhone and iPod touch. With a resolution of only 960x540 on a 3.5" screen, it's hard to argue in favor of HD when the device is so small that it doesn't have enough pixels for even 720p, must less 1080p.
In my case, my iPhone is the Apple device I carry most often and ALSO the device with the least amount of internal storage. Syncing SD content instead of HD is a no-brainer. But going forward if I want that SD content I'll have to pay extra.
I take this "unbundling" as a sign that Apple is ready to kill SD entirely and sell strictly HD content through the iTunes Store. As I pointed out, most Apple devices are capable of HD video at 720p, and more are capable of full 1080p (like the iPad 'Neue', the Apple TV, and the Retina MacBook Pro).
Hopefully the next iPhone with its rumored larger screen has enough pixels for HD too. Then I won't need that SD version of Deadwood, Season 1...