I think people are blowing this waaaay out of proportion. Streaming started out as free because there wasn't a market for it yet. Nobody knew what it was and very few ppl had the ability to use it. Now, millions and millions use it, and millions more have the ability to use it. Major change. also, most people I know, use streaming exclusively, so the DVD's are extraneous to them.
The streaming service has a life of it's own now, it should be separate. Despite the fact that the studios aren't big fans of the streaming concept, if Netflix has the resources to buy the big titles and even more content, they'll sell it to them.
I think this is a debatable decision, but it's getting blown way out of proportion.