And they have. Plenty of people subjected to all the advertising and hype for Blockbuster would be surprised and pleased to find that they can get a lot of the same stuff at public libraries for free. Not the very newest stuff, and not everything, but a lot, especially since you can get videos from other libraries through inter-library loan. If the public library were the only way to borrow videos people would certainly want a better alternative. But as an alternative to mass-market commercial services they do quite well and fill an important niche.
Now of course it's your taxes that pay for it, but in that case, isn't it wise to take advantage of what's available? Perhaps you'll find other things that aren't available at Blockbuster as well.