Um, no I don't think it's a ripoff, unless you watch like 1 or 2 dvds a month total then maybe it is, but even that is not really a 'ripoff' its just you not using the service. But also you are paying for the convenience factor. Watch it whenever you want, no video store trips, (hopefully) fast delivery.
For instance... in under a month I watched the entire first season of Dexter and True Blood. To buy that's 18 bucks for one, 38 bucks for another to buy. Someone else can calculate if you rented those disc by disc at Blockbuster but at 4 bucks a pop that's pretty expensive.
Cost for me? 16 bucks. and that's with all the convenience factors (and the following week I used "Instant View" on computer to watch the 2nd season of Dex).
Netflix = fantastic.