"As long as all temporary copies are deleted so there's no element of redistribution then there's no problem. Once you own a legal copyright to the material what you do with it, as long as it's not unlicensed distribution, is your business.
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Actually, as a consumer, you own the right to the COPY of the work you purchased. That has been extended to allow you to make a copy for your personal use.
In the case before this court, the defendant WAS redistributing COPIES of the work, not the original work, or even a faithful COPY of that work. By redistributing COPIES of the work, they were in violation of the copyright laws. It's that simple.
Right but the idea put forth was you send your legal copy of a DVD to someone else to modify for you. Since they don't own that legal copy they would have to take steps to ensure they do not maintain a copy of the DVD. Basically the company would have to make it as if you were making it yourself, ie all copies of the original would either have to be destroyed or given back to you.