I still prefer to own movies I like and I have many of them. (no, not SO many as YOU have, my adversary). I think that having them will allow me one day to stop paying constantly more and more expensive subscriptions. By the way, for me, the DVD standard was very strange. I think that the engineering industry works differently than IT/CS guys. They think of "a product" which consists of the medium AND the "protocol"…
That wouldn't work for such a mass market product made by many manufacturers, many of them cutting every corner that they can. Newer codecs often require a bit more power or memory to run so even if there was an upgrade path many players would be locked out of newer discs or disc makers would be forced to put two formas on the disc, one for better players and one for those capable of only the baseline, reducing the amount of space available for actual content.
DVD players, and consumer devices like them, are intended to be “black boxes” to the user, not something that they need to service by applying updates, and there wasn't the connectivity available back then that there is now for that to be done automatically – people would have had to bring something to the machine incurring a distribution cost. This couldn't be “just download and stick it on a USB drive” because many people didn't have much by way of Internet access at all at home, or often didn't even have a computer (or had one that wasn't recent enough to have the fancy new fangled USB thingies, and USB drives weren't the cheap throw-away trinkets they've since become). Remember: the standard was invented in 1995, first available to the public in 1996, and rose to significant adoption in the early 2000s.
You could include the update on the DVDs themselves, but that adds two problems. First there is security/stability: something could accidentally (or maliciously) brick the user device. Second is compatibility: they would have to constrain the hardware options considerably, rather than it being “anything that can run this codec” many more implementation details would need to be fixed in the standard. You also run into the earlier problem: there is a limit imposed by the lowest common denominator in hardware, either you have to dictate better hardware in the standard which makes things more expensive for the public (that would have massively slowed the early adoption) or you are only adding a little flexibility not enough for the process to be worthwhile.