I can't argue with your logic. But my experience is different- in the town I currently live the theater is worthless. I have to drive 100 miles to a decent theater; as a result, I haven't gone to see a movie this year. So I pretty much have to rent or buy, or not see the movie. That's not a hardship, though; I have a pretty decent system with a pair of potent subs, a nice Optoma projector and a pretty well treated room, acoustically. It's much better than any theater I've been in, plus I have my leather furniture, and of course BEER!
Here's the deal; if I rent something for $4 bucks and love it, then I have to pay $15-20 more to buy it on top of the rental fee. If I buy it and love it, I've saved $4. Of course, it's different if it sucks.
But in that case I'll usually trade or sell it. In point of fact excepting major releases that I'm pretty sure about (via word of mouth or reviews), I usually don't pay more than $8-$10 per DVD anyways, which really makes rental a waste of money for me.