The problem with library DVDs is that people treat optical media like crap. They get their greasy grubby cheeto encrusted fingers all over them when handling them. Then they use them as coasters or throw them in a pile in the corner of their bedroom.
Many of the library DVDs I've seen are full of fingerprints, deep scratches, and other blemishes. I am not getting all that mess in my Blu Ray player, or finding out that it's unplayable 60 minutes into a movie.