According to our Netflix Neighbors, they haven't been replacing their DVD stock for several years now - if all copies were broken, stolen or lost, well, that's it. And then, so many DVDs are out-of-print anyway - unavailable to sale to the Netflix-types. Ah yes, the big advantage to streaming! Or buying the disk.
The bigger issue, I see, is that "consumes one-third of Internet bandwidth on any given evening", and this is because ISPs have stingily refused to deliver greater bandwidths.
And it's because NetFlix has been the only streaming-game-in-town - nationally, at least. Hopefully, Amazon and everyone else can join in. But that low availability of large bandwidth remains one of the two biggest detriments to streaming.
DRM gets the other vote.