Have you tried Youtube? They have a pretty extensive catalog of rent-on-demand movies, and I rarely find a mainstream movie that I want to watch, that isn't in their catalog. Most of them range between $2.99 / $5.99 or so, with really recent releases going higher, and the rare oddball title that's $14.99 or something (presumably because that's what the rights-holder demanded?)

That was what fueled their move towards producing original content -- they knew they wouldn't be able to license third party content for much longer, and they needed to have something people would want to watch when that day came. They've explicitly said they see their future as being the next HBO, where what draws subscribers is access to Netflix-original content you can't get anywhere else rather than access to a deep catalog of content from lots of different sources.

> Basically match any Redbox prices (1-2 dollars)

Redbox has the same advantage that Netflix had back when they were shipping discs by mail, namely that discs are a physical artifact and thus subject to the first sale doctrine (https://en.wikipedia.org/wiki/First-sale_doctrine), which says that the seller of a physical good can't put artificial restrictions on what the buyer of that artifact does with it after they buy it. As long as copyright holders sell movies and such on discs priced for everyday consumers, services like Redbox can also buy those discs at the same low price and then rent them out to people, and the copyright holders can't impose a post-sale restriction to stop them. They sold the disc, once they took the money they lost the right to say what it could be used for.

Stream the same movie instead of delivering it on disc, though, and now since there's no transfer of ownership of a physical artifact, the first sale doctrine no longer applies. Anyone who wants to stream that movie has to negotiate separate streaming rights with the copyright holder; the copyright holder is free to demand however much it wants to as part of that negotiation; and if that price is too rich, the would-be streamer doesn't have the option to just buy a bunch of licenses on the consumer market the way they would with discs. Their only options are to pay what the copyright holder demands, or not carry the title. So

All of which means that streaming services will always be at a severe disadvantage price-wise to services that rent out physical media -- even before you start factoring in the cost of all the infrastructure needed to stream video reliably to a global audience.

FWIW, Netflix has had a scattered selection of The Dark Knight and Lord of the Rings off-and-on recently. I guess that might be your point, though…