That’s what the tvOS version of the product is for mainly – it’s also nice to use the AppleTV as a viewer for your video cameras at the same time. I set it up inside a matrix so the ATV is always viewing cameras and you can tune any TV to that. Anyway, yes ATV can be a primary and likely the new 2021 model with A12 does eliminate some of the slowness associated with that path using the old A10.
For the moment, I still recommend the “living room iPad as Primary” because I think that fits the largest number of people and starts them in the right mindset, but economically and functionally there is every reason to argue that the A12 ATV is a better choice. For one thing, it comes with Ethernet so you don’t need to get a USB adapter and an Ethernet USB adapter and then carefully keep an eye on it to make sure Wi-Fi and/or Bluetooth don’t turn back on as they seem to do sometimes during maintenance cycles after taking an iPad out of GA mode and power cycling the USB Ethernet adapter.
However ATV still has its crucial downside that it just randomly deletes everything whenever it feels like it. In general, that shouldn’t happen if you stay in Single App Mode and don’t restart. But it’s something to keep an eye on. In general, we have a medium term plan to have an option to delete everything ourselves on every launch, do a full iCloud sync each time like a new install (just for the tvOS edition), and that may provide a cleaner path going forward. It’s basically been “is Apple going to fix this nonsense or do we need to work around it with a time consuming download every launch”. Anyway, in general that issue is pretty mitigated right now, but holding the device in stasis, trying to avoid exits and relaunches, using Single App Mode, those are going to be the ways to try to lock it down and avoid the dreaded AppleTV storage purges. At this point the reality is that the Primary has so few duties that it rarely matters. As long as it can relay commands, it’s good to go.