Earlier analysis of this phenomenon on HN explained it by saying that once something is on Netflix, all hopes of making money on DVD sales are gone. Hollywood wants to sell physical media because that is what it knows how to do and has always done.
Therefore, movies will only be released to Netflix, Amazon, etc. if the studio is particularly forward-leaning or (more likely) evidence suggests that it's made all the money it's going to make in physical media distribution so there's no harm in offering it up for streaming.
If I recall correctly, Netflix's catalog improved substantially for a good while, but then large portions of it were retracted. That's another thing that has to stop before legitimate digital distribution is "good enough" - studios need to stop pulling movies every time they feel like it. It pretty clearly demonstrates an attitude that digital distribution channels are toys to be put away at any time rather than a core component of their business.