Netflix started out as a DVD sales company, you called and they would ship the DVD's to your house later they went digital, more of an evolution that a desperate attempt, also blockbuster was still making bank when Netflix started, so I don't know where the DVD sales dipping came from but I would need some evidence to believe it =0
they have the same level of trouble getting picked up by a publisher/streaming service, so being "hard" is no excuse when the current system is just as hard and more unfair for the studios in question
the problem with this is that it gives too much power to corpotions, services like netflix and Amazon prime have no real competition outside of exclusive content (not original but third party) and this makes it so that people have to pay for inept services for the product they want, so what does one do when they don't have the money or want to deal with the hassle? they either cheat the system (have afriend pass and account or a copy of the season) or they pirate.
if they are on netflix they are hardly independant, streaming buys licenses I.E they pay the studios for their product, the studios already made a profit even before you watch their series.
corporations do this specifically so that they don't go to JAIL, it isn't destroyed they can get into legal and financial problems since the numbers won't add up (Inventory is placed as an active wich is cash that the company has if you can't sell the inventory then the Active is erroneous and you can get in serious legal trouble). they don't do it cause they don't care they do it so the feds won't kick them into jail for doctoring their financial report. Also in some countries, they give them a tax break from the sales, but that's another can of worms