Your points are on the money for sure. I also found that Blockbuster adapted to my ability to copy a DVD pretty quickly. The whole process back then, if you only had one drive like I did, and you were copying it for a dvd player that didn't have any of the .Avi codecs (which as someone else pointed out wasn't very common, and it wasn't), it took foreverrrrrrr. Like it was pretty much an hour ish long process, sometimes even a bit more in the early days, whereas if you rented a movie from blockbuster they came out with that whole "you can just keep me for an additional $4.99" or whatever it was for that movie, but it very often wasn't all that much. So it's like sure I've now spent 8 or 9 bucks on this movie I want to keep. But if I burn it, the stack of blank dvds was still 20-30 bucks back in those days, which usually broke down to about like 50 cents or whatever each, so still cheaper. But then you factored in the hour and a half of pissing around, and half the time one of the blank discs would be bad, or you'd screw a setting up or whatever, like it would take multiple discs to do it sometimes, and it just often wasn't worth it.
That is until the dvd players that could read the .avi codecs caught up, and then .mp4 files and whatever else. Then you could usually slam a few movies on a disc if you didn't need fancy sound. That was the period of time it became much easier to just d/l and burn. Broadband Internet was in a lot more areas by that time, like you generally had faster speeds to d/l and the burners were burning by then at like 24x or even sometimes ~48x if I remember right. And you could have almost weeks worth of movies on a single dvd, if you were a one movie every few days kinda guy like i was.