The value Netflix provides is primarily convenience. There are other ways to watch movies and TV shows, the reason to use Netflix is that it's more convenient than the alternatives.
Having to deal with physical media (and wait for them to be delivered) is less convenient than other alternatives to Netflix. Therefore, it's a flaw of Netflix.
I'd much rather put up with the minimal hassle and a bit of a wait to get a great selection of DVDs.
The "hassle" amounts to me opening up an envelope, putting the DVD in to my DVD player, putting it back in to the envelope when I'm done and throwing it in to a mailbox on my way to work.
Sure, it's not as easy as hitting play in a streaming app, but not really a big deal, either.
Which was exactly my point. It's a flaw of Netflix that it's streaming collection isn't as good as it's DVD collection.
I don't plan for movie night days in advance. I'm not going to rent that shit in the mail. So after a few years of not touching my DVD player, I threw it out.
The content owners are the real ones losing out here. I'd pay $4 to stream any movie, there's just no service I'm aware of that offers them all digitally at that price.
I just recently started using VidAngel though, and I'm happy with it so far. They advertise being able to filter movies, but you can always just filter a single word if you don't want anything filtered. It's $1 for SD and $2 for HD. They have an interesting licensing model though so you sort of have to have a constant $18-$19 deposit with them.