The proper solution would be for a company to sell DVD players that could accept open-format "edit lists". I think there was legislation awhile ago to explicitly allow for such, though I don't know what happened to it.
Read this paragraph in the story. It should clear it up:
"CleanFlicks produces and distributes sanitized copies of Hollywood films on DVD by burning edited versions of movies onto blank discs. The scrubbed films are sold over the Internet and to video stores."
You ain't allowed to make copies to sell.