I would much rather have an old fashioned dumb tv than a spying, adverising injecting, sluggish smart tv with crappy apps that never get updated. So the hedonic adjustment should definitely be negative.
IMO the adjustment should not be proportional to f(diagonal length), but f(diagonal length, average living room diagonal length), because the optimal viewing experience comes from picking a correct TV size for the distance between you and the screen.
I'm also seconding the proposal for negative hedonic adjustment on TVs (and arguably everything) that's a function of amount of advertising shown through them.