For you and me, it certainly doesn't need WiFi, but I think we need to consider how this new device could push X10 forward rather than how it will solve our own problems. It's not that the TIP10RF isn't a feasible solution; it appears to be a very good solution for us diehards who already see the value of X10 and want more ways to control it. I think the main thing is that adding complexity to the setup increases the barrier to entry. Other automation firms are offering a device that is nearly plug-and-play -- plug a box into an outlet, install an app, pair them, and you're ready to control your modules. If the "new" X10 device requires a separate WiFi router, cable to be run to the device, and a separate X10 RF-PLC transceiver, then it's already lost the battle. We may scoff at how petty this seems and how it barely matters to those of us with the experience and familiarity, but if X10 is really going to compete with the newer systems, it needs to appear to be as streamlined, advanced, and user-friendly as the alternatives. That may help stop the bleeding and afford less separation between the diehards and the newcomers. Ethernet does offer more versatility, so in the long term I'd love to see the device come with both options, even if they're in separate models.
And I'm not saying your mod looks difficult. It doesn't, at all, to me, and I would certainly try it. But you tell some people that they'll be working around line voltage devices and voiding the safety certification on them and they'll say it's not worth the risk of getting electrocuted or burning their house down, no matter how extremely unlikely either of those is when they follow directions and practice common sense.
I'm still interested to hear your results with the Android app!