No. It's supposed to increase sales of new release DVDs for Warner while (rumor), in exchange, Warner allows Netflix to stream more movies. Similar deals are expected with other movie companies.
And, yes, your implication that it might increase piracy seems accurate to me.
Book publishers, concerned over Kindle cutting into hardcover sales, are looking to do the same thing with Amazon. . .delay the release of the Kindle version of new books.
Whether books or videos (or music) these are markets failing to recognize a new paradigm and grasping desperately at a dying business model. A great example of how disruptive technology can never (or very rarely) come from established players in an established market.