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?
To do it youself at home is completly legal and fair use.
It is like hitting FF or Mute.
I think we need to distinguish between RENTAL vs BUY.
If I BUY a DVD for $20 and pay $5 EXTRA for a sanitized edit, which I completly own both copies. That should be legal.
If the studios are too financially stupid to see the market then they are just going to die out.