Nothing "liberal" about the ruling. Resellers are subject to whatever terms are imposed by the owner of the work, so if the owner says "no cuts" then the reseller is in breach of contract. Nobody's forcing anybody to resell the item so if they know the conditions going in then they have nothing to complain about.
What if these businesses simply rearranged the order of events thus: We don't sell the cleaned-up videos. You bring us your legal copy of a movie and we'll edit it for you, then destroy the original copy.
Does the owner of a legal copy of a movie have the right to edit their copy? If so, can they pay someone else with the necessary equipment to perform that service for them?