i had media center powered by a few perl script that would transcode all videos into formats that ps3 supported in 2007-ish. Yes ffmpeg had a lot of options, 99% of them does not matter, there really only 3 ways to stream to client: as is, repack streams into something client support (i.e. your source is mkv) or transcode into something client support (clients know which formats they support).

People that run these services don't want "dynamic stream quality selection".