You are wrong in that assumption.
Hollywood riled up over ClearPlayIt no longer matters anyway as Congress passed a law legalizing ClearPlay's technology. But the studio's were opposed to it (and still are), market share be damned)....
Studios and filmmakers are stunned that someone not involved in the creative process could technologically chip away at their work — and make money at it. So lawsuits aiming to get the processes deemed illegal are underway.
Ha Ha! I knew I was right.
This is the key paragraph:
But those editing decisions are made by the movie studios, if not by the directors themselves. Not by a handful of people in Utah..
The copyright holder want to retain control of the material. This is the most basic aspect of business sense. If you own something, you don't let control of it slip away.
I have to admit that if I were a movie producer and spent a lot of time and energy to make a movie just the way I envisioned it, it would bother me to see others making money off of an edited, "sanitized" version of my movie. I don't know if there is any legal recourse, but I can certainly understand why a producer would have a problem with it.
It's hard to say that it violates copyright, though, since it does not change content, only the way content is viewed. I can watch any movie with the sound completely off and music playing in the background, if I want to - it does not change what's on the DVD.