Consumers are willing to pay more for VOD because its easier. Having to return the disc is a pain in the ass.
AFAIK - only in the US though, there was much talk at launch of how they got special deals with the US postal service.
Whatever happened to those guys...? (https://dvd.netflix.com/)
Apparently they still do it - I thought it was phased-out for streaming years ago.
What if I extend an HDMI cable from my DVD player to your TV?
My library manages to lend ebooks; they even have wait lists for them.
Those are made available in that format by the publisher. No equivalent for movies is available (as far as I am aware).
Also my understanding is that it was never entirely clear if lending ebooks like that in the US was legal or not. The publishers and lenders both carefully avoided the issue going to court IIUC. (Prior to the Internet Archive's actions, that is.)
If you're basically just walking by the box anyway while doing something you'd be doing otherwise, sure it's cheaper to drop $2 for a disc.
If you have to make a deliberate trip, you've transportation & opportunity costs. 2 round trips to the box, just to get/return the disc, is 6 miles total (1.5 miles one-way by road & parking lot) for me; at >$3/gal gas (wear/maintenance not included) that's >$1.50 plus the $2 rental. Then there's the time spent getting the disc, as several people wait around for someone to fetch it; if we're already at cumulative $4 cost, I'll pay the extra $1 (<$0.25 each) just so the group can watch what we want right now with a mere wiggling my thumb and not wait around half an hour.
I'm an engineer. I explain things in excruciating detail. That's what I do.
Maybe they'll make a comeback?