Problem is they turn around and distribute the edited content. You can edit stuff you own all you want, but you can't turn around and sell it. Heck the redistribution alone was a copyright violation even without the editing.
AFAIK, they had a legal copy for each and every cleaned-up copy they sold. The whole process is simply rearranging the order of events. What's the difference if the customer bought the movie at Wal-Mart then brought it to a business that edited that copy for content?
I just don't buy the whole legal reasoning of this decision. These companies have not affected the actual content of the videos distributed by the studios, but only edited individual, legal copies of the movies for some customers. It seems to be a shoot-yourself-in-the-foot-just-to-prove-a-point situation. These studios will now sell fewer copies of their movies. It's just nuts.
You can't second-hand DVDs? There are numerous places here that buy and sell used DVDs. How is that a copyright violation? Are used book stores in the same category?