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Priced at $50 it has terrible quality.
So... any idea why it's so bad?
The main reason is probably that 1080p30 is 1580 MBits and USB2 is only 480 MBits, so it has to do decompression.
Can you explain why you mention USB? It's Lightning to HDMI...
It’s just bad. As a product, it’s bad. Terrible quality, compression artifacts etc.

From a design approach perspective it’s bad because, lightning has USB 2.0 bandwidth only. So they had to build an airplay server on the dongle that decodes a compressed H.264 and outputs an HDMI signal. There are better ways of doing that. One way is to actually have enough pins on the standard to support uncompressed HDMI output like USB-C

What are the motivations for putting things like Apple Secure Boot in there? It makes me wonder if they someday want to be able to say "this dongle is not Apple approved".
That would not surprise me at all.

I've experienced several third party charging cables that somehow stop working so reliably immediately after an iOS update.

Apple definitely wants as much of the pie as they can get.

Don't they already do that? Apple used a chip in official and licensed lightning cables, and ones that didn't have the chip would prompt iDevices to say that the cable isn't Mfi certified.
I think the title needs an edit: "lighting" should be "lightning".
Thanks, I was wondering if Apple was making a competitor to Hue bulbs.
Agreed, I was initially confused too.
Updated. Thanks!
Every HDMI adapter that isn't a computer is going to severely degrade performance.