Very dumb idea. It is no suprise that Disney is losing money.
It won't cost any less to make these DVDs than a regular DVD so they wouldn't be able to sell them for much less. If they are over $5 or so per disc they probably won't sell well at all.
As others have pointed out, what if you fall asleep or have to leave halfway through the movie? You are out of luck.
I hate renting movies from Blockbuster or Hollywood video and haven't set foot in a video store since I found Netflix. Netflix by far is one of the best innovations to come along in the past few years. No late fees, keep the movies as long as you want, "unlimited" rentals.... all in all a very good service.