They can claim they are filling a need, but the fact is, its not their property to alter, they do not have the rights to do that, and especially to profit off of someone else's work. That is why there are copyright laws. If I wrote a book or directed a film, its mine, and it will be in the format I decide its going to be in, not anyone else.
I don't care how you feel about this, its a property argument. The films are not in the public domain, they are owned by someone and they decide what happens to it.
In fact they were filling a need because there was a demand for their services. Obviously, they were breaking the law -- but that has nothing to do with the demand.
The film companies, in their typical business wisdom, only saw the copyright issue and not the business opportunity that was handed to them.
It's no longer their property after they have sold it. If I buy a book, then that book is my property and I can take a Sharpie and mark out any words I don't like. I can draw Hitler mustaches on Hillary Clinton's photo on the dust cover. Where in the law does it say I can't do that? Shouldn't I be able to pay someone to do that for me?