The bottom line is that DVD copies are technically illegal. Why else did they incorporate Macromedia encryption to stop copies to VHS? That we have DVD copying software readily available is a byproduct of the hacker scene more than any consent from the studios.
The bottom line to the companies is that they don't want this backdoor open to the consumer. It's understandable from the studios' perspective, no matter how much I personally disagree with it. For dollars and sense, it's just asking for someone to crack the encryption and once again make blockbuster host to thousands of cheap movies. With BD already boasting write capability as its main selling point, and the presence of rewriteable DL-BD already, it means that consumers will have access to master-quality copies of studio productions from pretty much Day1. Gee...that's a backdoor left unlocked and unguarded IMO. Once the encrpytion is cracked, you'll already have every torrent site from here to Hong Kong sitting on hundreds or thousands of copies of these movies just waiting to your street vendor to burn at full quality and sell on the cheap.
I don't agree with it, b/c I love cheap movies. But I'm not gonna pretend it's not a major issue for the studios who already pretend that piracy is killing their wallets. If it gets the studios on-board, it's a no-brainer for the BDA to incorporate that safeguard into their format.
IMO, the MMC issue has now become the rally cry for the HD-DVD supporters b/c the price argument is getting beaten bloody. That was the previous complaint this summer, despite knowing of these other aspects before. Since Matsushita has recently made that a non-issue (as many of us predicted it would be), the MMC argument has taken center stage. HD-DVD is dead. Good riddance. I don't think it's unfair to say that either. It was the inferior product from the technical standpoint, and a protracted format war would have been far, FAR worse for the consumer than any of this manage copy bs anyway. If you care about MMC so much, take comfort in knowing that there are far more hackers/crackers than BDA engineers. It will be broken in the fullness of time, and with the ability to support full movies in the new tv standard that will last for decades, you'll eventually be able to back up all your movies (albeit illegally) in full quality. As it it even matters. PEACE.