I Like the idea of On demand media but in all honesty we all know it cant take off in this day and age with Illegal File sharing and what not. Although I do prefer this kind of thing instead of having physical media that for instance you could damage during the rental period. 3.99 aint at all bad either considering Blockbuster's 'credit crunching' prices.
All in all its a service that wont generate all too much, Then again I do rent movies from xbox live with microsoft points