Even if most things support, say, H.264 out of the box, each video decoding SoC has different quirks which means either A) the same encoding looks different on different hardware or B) the encoding fails to decode on different hardware, so even the same codec can have a bunch of parameters which can/need to be adjusted for different devices.
One smart TV might have a Broadcom SoC with a GPU which supports h.264 decoding like the Raspberry Pis do, an Android tablet might have a Mali GPU which can decode VP9 and HEVC, some weird older set top box which has netflix built in might only support MPEG...
Scaling a video on the client looks like crap and is slow. So you have to deal with all the fiddly screen resolutions, of which the distinct count used to be truly awful but now is much better. However you have to add tablets in which cancels out some of the gains in sanity.
On the bandwidth thing, I wouldn’t put it past Netflix to reencode popular movies with a more time intensive compression settings to achieve better aggregate bandwidth usage but not hold up new releases.
You've no realistic option than to support whatever formats that the hardware has native decoding support, and you'd prefer H265 over 264 (bandwidth costs money) if it's available, and there are many different HDR formats.
Why? Don't they write/control their own client apps and video players? Why isn't a single codec with a choice of 3 or 4 different resolutions sufficient?