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.)
Consumers are willing to pay more for VOD because its easier. Having to return the disc is a pain in the ass.