What's the problem with ripping DVDs? It takes me 20 minutes with handbrake on my iMac. Then I stream them to my jail broken aTV or my iOS device with an app "Air Video".
Yeah, regular users are never going to do that. Never. The solution needs to be similar to iTunes Match: put a DVD in a drive, connect to iTunes, pay $5 (or a monthly/yearly fee), get unlimited access to the HD digital version through iCloud.
Humorous that the biggest barrier to entry there may be the death of the optical disc drive.