If a person rips a DVD, edits it, then re-authors the DVD they are breaking the law.
If they charge someone money to do it, they are breaking the law.
Bottom line, what's being done is NOT simple editing. The companies (AKA Hackers) that are doing this are going out of their way to bypass copy protections built into the DVD (a violation of the law), duplicating the original DVD (another violation) converting the MPEG streams into a form they can edit (another violation) altering those streams (another violation) re-authoring the DVD, using some original elements (graphics for menus, etc) re-encoding (most likely doing a piss poor job of it with some cheap-cheesy software only encoder) then reburning the DVD, most likely with NO copy protections, or region codes, and then selling the resulting DVDs to their clients (another violation)
IMHO, the ONLY difference between people who do this, and the schmucks that sneak video cameras into a movie theater so they can sell bootleg copies of movies, is the holier than thou speeches about "Doing it for the Children".
Good Ruling! Now prosecute!
If they charge someone money to do it, they are breaking the law.
You seem to be the only one here who believes this. The rest of us seem to agree that altering one's own, legal copy is legal.
Courts have held in many cases that anything may be copied for personal use (backup, etc.) without violation. The DVD's with copy protection seem to be, legally speaking, a new beast. No other material has been protectable in this way before, so the subject hadn't come up. It seems to me that the legal principle still applies: that anything done to copy a work strictly for the personal use of its owner and no other should be OK.