Have Jellyfin automatically play supported version of a movie

[Venson]

Oh, and I would like to add that more and more people are looking for low cost hardware to run the Jellyfin server on. I use a Raspberry Pi because of the cost of electricity. As mentioned in my first post, in my neck of the woods, running a small laptop would cost me between $40-$80 per month. The Pi only $4-$8. And that laptop would probably be able to only transcode one stream at a time. If you want to transcode multiple streams, then you probably need hardware that has even higher power consumption. And then you are completely missing the goal of such a media server in the first place. Because, let's be honest. Most people use Jellyfin as an alternative to having to have a subscription to multiple streaming services. So if the energy costs of your hardware are higher than the combined costs of those subscriptions, your are missing your goal.

On the other hand, storage is dirt cheap. I can get a 2TB SSD for under $50. That will store 200 4K movies. Or 150 4K movies plus their 1080p versions.

You say the objective of Jellyfin is to format shift files so they are compatible with the clients. Yet it offers the ability to store multiple versions of the same media in different formats so you can manually choose which version will play on the device you are watching on. The only reason people would do this is to prevent transcoding. Otherwise you would always choose the one with the best quality (= higher resolution, HDR, etc). So why not offer the option to do this automatically?

Well first topic: Hardware.
We have a brand new Hardware Selection guide where we go into the ins and outs of Hardware selection. But you cannot expect to run an very hardware expensive process like jellyfin on an SBC that is just underpowered for it. Thoese two things just dont match up, we cannot bend the rules of physics. RPi is just so underpowered that even a single transcode will bring it to its knees. 
To be absolutly clear here: Jellyfin is __not__ here to replace any streaming service. Jellyfin is a __HOME__ media server, not an online streaming replacement. It is for your own selection of media, that might be movies or some of your vocation clips.

As Skribe already said, you are free to implement a feature that automatically selects the right version into the server and PR it. No one bothered with that yet so it is not there. We (the jellyfin team) are not the only ones working on Jellyfin, everyone can and many people outside the regular contributes do. There is no general red line, what the team implements or dont. Everyone is free to work on everything they like to and if they dont have time or dont feel like it, they will not to anything at all. Jellyfin is a FOSS project after all.