Customer's want the best service
I read a comment on a similar story a while back that sticks with me. It was simply "The best SERVICE currently available is TPB."
You can say to yourself "ooh, I haven't seen that movie, lets watch that", or "I haven't listened to them for ages, I'll grab that album" and in under 30mins you can be listening to / watching the media you wanted. I have never been unable to find what I want, at the quality/size that I want.
I'd pay a decent chunk of money for that kind of service, no doubt.
The alternative is trawling through half a dozen legal services which *might* have what you want, each of which is hampered by exclusive deals with content providers and/or network instability. I tried netflix and lovefilm and am a subscriber to spotify. The latter works fine (though there are always things I want to listen to that aren't available), the others were distinctly unimpressive.
When it comes to books, forget legal. Ridiculous pricing coupled with exclusive releases that lock you to specific hardware (Amazon, anyone?) make it a joke.