Assuming people are like me and rarely watch a movie more than once unless it's exceptionally good, why pay $20-$30 or more for a DVD when you can rent it at RedBox for a buck or watch it on demand or on Netflix.
OK I bought the disk, but I can't make a backup copy or skip the ads and previews?
Oops, I dropped it or my kids got ahold of it, and now there is a little scratch on the disk, and it's entirely unplayable. Tapes were far more rugged, if slightly bulkier.