Silicon Alley Insider is reporting that Hulu is coming to the iPhone within a few months — its video is also reported to support streaming content over wifi and 3G.  This new app, called “badass”, is following the existing web video apps for the iPhone including CBS’s TV.com, Joost, i.TV and many others.

Why would Apple and AT&T approve this app, which will use up a lot of bandwidth and compete with Apple’s iTunes video store? Because it will help sell iPhones, iPod touches, and AT&T subscriptions. And that’s the whole point of the App Store. (And if we were Hulu, we’d offer Apple and/or AT&T an ad revenue-sharing deal, too.)

Hulu is an online video service that offers hit TV shows, movies and clips. Founded in March 2007, Hulu is co-owned by NBC Universal, News Corp. and Providence Equity Partners.