I disagree. It costs Netflix too much money right now to mail out physical discs. It's why they want to move to the streaming-only model. That, however, requires Hollywood being completely on board. And that is a complicated proposition, one that involves not only the content producers but other content providers such as the cable companies, networks, etc.
I think Netflix did what they did in part because of cost - but also in part because they see the DVD as a legacy product that's on it's way out, much like the floppy disk was on it's way out back in the 90s when Apple first introduced the blueberry iMac. Netflix just is exerting it's (growing) power to help hasten it's death - and I think it's doing so deliberately.
I just wanted to comment on this one. I have serious doubts that Netflix will be able to exert any kind of control over Hollywood. Hell, the cable providers could easily cripple Netflix by throttling data traffic from Netflix's servers or put a bandwidth cap to limit consumer enthusiasm for streaming movies.
If cable companies could do that, I think they would - but they've got regulation (in the form of an aggressive, pro network-neutrality FCC) and competition (e.g., DSL, satellite, and increasingly 3G, possibly other products) that prevent them from being able to do that. The FCC won't allow throttling and the market won't allow capping.
What Netflix knows (and what Hollywood is increasingly finding out) is that if consumers want streaming and digital content (which they increasingly do), they will either go to a viable paid subscription system like Netflix, or they will go elsewhere (e.g., gray markets, piracy, etc.), and they don't want that. Apple has had the same tussles with the music industry regarding licensing for years regarding iTunes - and the music industry tried to resist iTunes but now they realize they can't, because the alternative that consumers have and will exercise is piracy.
They hate playing ball with Apple and giving Apple power but they hate the alternative more. The same dynamic is at play with Netflix and Hollywood.
Seems pretty clear to me.